Recent positional cloning of the radiation-induced polycythaemia (Pcm) mutation revealed a 58-bp microdeletion in the promoter region of ferroportin 1 (Fpn1), the sole cellular iron exporter identified to date. Here we report a molecular definition of the regulatory mechanisms governing the dynamic changes in iron balance in Pcm heterozygous mice between 3 and 12 weeks of age. Therein, hepatic and/or duodenal response patterns of iron metabolism genes, such as Trfr, cybrd1 and Slc11a2, explained the transition from early postnatal iron deficiency to iron overload by 12 weeks of age. A significant delay in developmental upregulation of hepcidin (Hamp), the pivotal hormonal regulator of iron homeostasis, correlated with high levels of Fpn1 expression in hepatic Kupffer cells and duodenal epithelial cells at 7 weeks of age. Conversely, upon upregulation of Hamp expression at 12 weeks of age, Fpn1 expression decreased, indicative of a Hamp-mediated homeostatic loop. Hamp regulation due to iron appeared not dependent on transcription-level changes of the murine homolog of Hemojuvelin (Rgmc). Aged cohorts of Pcm mice exhibited low levels of Fpn1 expression in the context of an iron-deficient erythropoiesis and profound iron sequestration in reticuloendothelial (RES) macrophages, duodenum and other tissues. Thus, similar to the anemia of chronic disease, these findings demonstrate decreased iron bioavailability due to sustained downregulation of Fpn1 levels by Hamp. We conclude that regulatory alleles, such as Pcm, with highly dynamic changes in iron balance are ideally suited to interrogate the genetic circuitry regulating iron metabolism.