Hereditary haemochromatosis is an iron overloading disorder caused by common mutations in the HFE gene. However, information with respect to the function of HFE protein does not explain how mutations in HFE lead to hereditary haemochromatosis. We propose a molecular model in which HFE has two mutually exclusive activities in cells: inhibition of uptake or inhibition of release of iron. The balance between serum transferrin saturation and serum transferrin-receptor concentrations determines which of these functions predominates. With this input, HFE enables the intestinal crypt cells and reticuloendothelial system to interpret the body's iron requirements and regulate iron absorption and distribution. In our model, mutations in HFE result in over absorption of dietary iron, and patterns of tissue iron deposition in agreement with clinical observations of hereditary haemochromatosis.