Hereditary hemochromatosis is a common autosomal recessive disorder of iron metabolism. Recent demonstration of an association between transferrin receptor (TfR) and HFE, a major histocompatibility complex class I-like molecule that has been implicated to play a role in hereditary hemochromatosis, further strengthens the notion that HFE is involved in iron metabolism. Herein we show that TfR is required for and controls the assembly and the intracellular transport and surface expression of HFE. Because surface-expressed HFE and TfR remain firmly associated physically, only the fraction of TfR that is associated with HFE during biosynthesis is affected functionally. Moreover, we show that HFE binding reduces the number of functional transferrin binding sites and impairs TfR internalization, thus reducing the uptake of transferrin-bound iron. Thus, iron homeostasis is indirectly regulated by HFE, a negative modulator of TfR.