Background Hepcidin is the key regulator of systemic iron homeostasis and is downregulated by matriptase 2 (MT2), a protease encoded by TMPRSS6 gene. In the presence of low iron levels, MT2 cleaves membrane-bound hemojuvelin (HJV), causing a negative regulation of hepcidin at the gene level, and restores iron balance. rs855791T > C, a missense variant in the catalytic domain of MT2, causes valine to alanine change at 736 position. The current study aimed to investigate the association of TMPRSS6 rs855791 on iron status among a cohort of pregnant women in Sri Lanka and to predict the possible molecular mechanisms. Methods The study was conducted among 73 pregnant women at ≤ 12 weeks of gestation. Iron deficiency was defined as serum ferritin < 30 μg/L after adjusting for inflammation. rs855791 was genotyped with a PCR–RFLP, and its association with iron deficiency was analyzed using binary logistic regression. Docking of HJV with MT2 protein encoded by the two rs855791 alleles was undertaken in silico to predict the molecular mechanism of the observed associations. Results The majority of the study population (70%) were iron deficient. Among the subjects, T allele was prevalent in the iron deficient group with a frequency of 61.8%, with a nearly twofold enhanced risk for iron deficiency (OR = 2.566, 95%CI; P = 0.011). For TT genotype, the risk of iron deficiency was nearly sixfold (OR = 5.867; 95%CI; P = 0.023). According to the in silico analysis, MT2 736A and HJV complex is more stable with an interface energy of − 7.934 kJ/mol compared to the MT2 736 V and HJV complex which generates an interface energy of − 4.689 kJ/mol. Conclusion The current study suggests that the iron regulatory effect of rs855791 of TMPRSS6 is brought about by the differences in thermodynamic stability of the two protein complexes made by MT2 and HJV proteins. The prevalence of iron deficiency observed among Sri Lankan pregnant women may be an interplay between the prevalence of rs855791 T allele and the low dietary iron intake.