As a functional component of erythrocyte hemoglobin, iron is essential for oxygen delivery to all tissues in the body. The liver-derived peptide hepcidin is the master regulator of iron homeostasis. During anemia, the erythroid hormone erythroferrone regulates hepcidin synthesis to ensure the adequate supply of iron to the bone marrow for red blood cell production. However, mounting evidence suggested that another factor may exert a similar function. We identified the hepatokine fibrinogen-like 1 (FGL1) as a previously undescribed suppressor of hepcidin that is induced in the liver in response to hypoxia during the recovery from anemia, and in thalassemic mice. We demonstrated that FGL1 is a potent suppressor of hepcidin in vitro and in vivo. Deletion of Fgl1 in mice results in higher hepcidin levels at baseline and after bleeding. FGL1 exerts its activity by directly binding to bone morphogenetic protein 6 (BMP6), thereby inhibiting the canonical BMP-SMAD signaling cascade that controls hepcidin transcription.