Hepcidin is the major regulator of systemic iron homeostasis in mammals. Hepcidin is produced mainly by the liver and is increased by inflammation, leading to hypoferremia. We measured serum levels of bioactive hepcidin and its effects on serum iron levels in mice infected with Borrelia burgdorferi. Bioactive hepcidin was elevated in the serum of mice resulting in hypoferremia. Infected mice produced hepcidin in both liver and spleen. Both intact and sonicated B burgdorferi induced hepcidin expression in cultured mouse bone marrrow macrophages. Hepcidin production by cultured macrophages represents a primary transcriptional response stimulated by B burgdorferi and not a secondary consequence of cytokine elaboration. Hepcidin expression induced by B burgdorferi was mediated primarily by activation of Toll-like receptor 2.