The major histocompatibility complex-encoded gene, Hfe, has been implicated to play a pivotal role in hereditary hemochromatosis, a common autosomal recessive disorder of iron metabolism. The recent finding that a physical interaction between HFE and transferrin receptor establishes a functional link between HFE and transferrin receptormediated iron metabolism in the pathophysiology of hereditary hemochromatosis. To elucidate the underlying mechanisms by which HFE interacts with and affects transferrin receptor function, we have systematically investigated the consequences of the HFE-transferrin receptor interaction in cellular iron homeostasis. Herein we show that in HFEexpressing cells, the amount of intracellular transferrin is decreased by ෂ28%, despite a ෂ40% increase in surfaceexpressed transferrin receptor. Kinetic analysis of receptor-bound transferrin endocytosis reveals that HFE expression not only reduces transferrin binding but also abrogates transferrin receptor endocytosis. As a result, HFE expression leads to an accumulation of non-functional transferrin receptors at the cell surface, and a decrease in iron uptak. Moreover, HFE expression induces hyper-serine phosphorylation of the transferrin receptor. Taken together, these results suggest that HFE negatively modulates cellular iron uptake by impairing transferrin receptor endocytosis via HFE-induced receptor phosphorylation. Genes and Immunity (2000) 1, 409-417.