Iron-refractory, iron-deficiency anemia (IRIDA) is a familial disorder characterized by iron deficiency anemia unresponsive to oral iron treatment but partially responsive to intravenous iron therapy. Previously, we showed that IRIDA patients harbor loss-of-function mutations in TMPRSS6, a type II transmembrane serine protease primarily expressed by the liver. Both humans and mice with TMPRSS6 mutations show inappropriately elevated levels of the iron-regulatory hormone hepcidin, suggesting that TMPRSS6 acts to negatively regulate hepcidin expression. Here we investigate the relationship between Tmprss6 and the bone morphogenetic protein (BMP)–Smad signaling pathway, a key pathway promoting hepcidin transcription in hepatocytes. We show that livers from mice deficient for Tmprss6 have decreased iron stores and decreased Bmp6 mRNA, but markedly increased mRNA for Id1, a target gene of Bmp6 signaling. In contrast, mice deficient for both Tmprss6 and hemojuvelin (Hjv), a BMP coreceptor that augments hepcidin expression in hepatocytes, showed markedly decreased hepatic levels of hepcidin and Id1 mRNA, markedly increased hepatic Bmp6 mRNA levels, and systemic iron overload similar to mice deficient for Hjv alone. These findings suggest that down-regulation of Bmp/Smad signaling by Tmprss6 is required for regulation of hepcidin expression and maintenance of systemic iron homeostasis.