Systemic iron homeostasis is finely regulated by the liver through synthesis of the peptide hormone hepcidin (HAMP), which plays an important role in duodenal iron absorption and macrophage iron release. Clinical investigations have shown that chronic and low-grade inflammation leads to the increase of serum HAMP levels and the development of various diseases such as anemia of inflammation. However, gaps remain to fully elucidate the mechanism linking inflammation and iron dysregulation. Here we show that although inflammatory stimuli increase hepatic HAMP expression and cause systemic iron deficiency in mice, they inhibit the expression of peroxisome proliferator-activated receptor γ coactivator-1α (PGC-1α), a transcriptional coactivator actively involved in metabolic regulation. Liver-specific overexpression of PGC-1α antagonizes lipopolysaccharide-induced HAMP expression and alleviates various pathophysiological changes similar to anemia of inflammation. Consistently, overexpression of PGC-1α in HepG2 or HuH7 cells also suppresses HAMP expression and reduces iron accumulation. In contrast, knockdown of PGC-1α exaggerates LPS-induced HAMP expression and iron dysregulation. At the molecular level, PGC-1α suppresses HAMP transcription via the interaction with hepatocyte nuclear factor 4α. In addition, PGC-1α is present near hepatocyte nuclear factor 4α-binding site on the proximal HAMP promoter and turns the chromatin structure into an inactive state. Our data suggest a critical role for PGC-1α in the regulation of hepatic HAMP expression and iron homeostasis under inflammatory circumstances.