Standard analyses applied to genome-wide association data are well designed to detect additive effects of moderate strength. However, the power for standard genome-wide association study (GWAS) analyses to identify effects from recessive diplotypes is not typically high. We proposed and conducted a gene-based compound heterozygosity test to reveal additional genes underlying complex diseases. With this approach applied to iron overload, a strong association signal was identified between the fibroblast growth factor-encoding gene, , and hemochromatosis in the central Wisconsin population. Functional validation showed that fibroblast growth factor 6 protein (FGF-6) regulates iron homeostasis and induces transcriptional regulation of hepcidin. Moreover, specific identified variants differentially impact iron metabolism. In addition, FGF6 downregulation correlated with iron-metabolism dysfunction in systemic sclerosis and cancer cells. Using the recessive diplotype approach revealed a novel susceptibility hemochromatosis gene and has extended our understanding of the mechanisms involved in iron metabolism.