Background Iron is essential for all mammalian life, and either a deficiency or excess of iron can cause diseases. AMP‐activated protein kinase (AMPK) is a critical regulator of metabolic homeostasis; however, it has not been established whether AMPK regulates iron metabolism. Methods Iron, hepcidin and ferroportin levels were examined in mice with global and hepatocyte‐specific knockout of AMPKα1 and AMPKα2. Primary AMPKα1 or AMPKα2 deleted hepatocytes were isolated and cultured in hypoxia condition to explore PHD2, HIF and hydroxylated HIF1α levels. We performed immunoprecipitation, in vitro AMPK kinase assay and site‐direct mutant assay to detect phosphorylation sites of PHD2. We also obtained liver tissues from patients with anaemia of chronic disease undergoing surgery, AMPKα1 and hydroxylated HIF1α levels were measured by immunohistochemical analysis. Results We found that mice with global deficiency of AMPKα1, but not AMPKα2, exhibited hypoferraemia as well as iron sequestration in the spleen and liver. Hepatocyte‐specific, but not myeloid‐specific, ablation of AMPKα1 also reduced serum iron levels in association with increased hepcidin and decreased ferroportin protein levels. Mechanistically, AMPKα1 directly phosphorylated prolyl hydroxylase domain‐containing (PHD)2 at serines 61 and 136, which suppressed PHD2‐dependent hydroxylation of hypoxia‐inducible factor (HIF)1α and subsequent regulation of hepatic hepcidin‐related iron signalling. Inhibition of PHD2 hydroxylation ameliorated abnormal iron metabolism in hepatic AMPKα1‐deficient mice. Furthermore, we found hepatic AMPKα/PHD2/HIFα/ hepcidin axes were highly clinically relevant to anaemia of chronic disease. Conclusion In conclusion, these observations suggest that hepatic AMPKα1 has an essential role in maintaining iron homeostasis by PHD2‐dependent regulation of hepcidin, thus providing a potentially promising approach for the treatment of iron disturbances in chronic diseases.