Hereditary hemochromatosis (HH) is a prevalent, potentially fatal disorder of iron metabolism hallmarked by intestinal hyperabsorption of iron, hyperferremia, and hepatic iron overload. In both humans and mice, type I HH is associated with mutations in the broadly expressed HFE/Hfe gene. To identify where Hfe acts to prevent HH, we generated mice with tissue-specific Hfe ablations. This work demonstrates that local Hfe expression in hepatocytes serves to maintain physiological iron homeostasis, answering a long-standing question in medicine and explaining earlier clinical observations.