Recent positional cloning of the radiation-induced polycythaemia (Pcm) mutation revealed a 58-bp microdeletion in the promoter region of ferroportin 1 (Fpn1), the sole cellular iron exporter identified to date. The microdeletion causes aberrant transcription initiation and results in the absence of the iron-responsive element in the 5′ untranslated region of the vast majority of Fpn1 transcripts, thereby disrupting translational regulation of Fpn1 expression. Pcm mutant mice exhibit the gamut of iron balance disorders, ranging from iron deficiency at birth to tissue iron overload by young adulthood. Consistent with the perinatal iron deficiency, Pcm pups display a microcytic, hypochromic anemia. Strikingly, the majority of young adult Pcm heterozygous animals display a transient erythropoietin (Epo)-dependent polycythemia with peak hematocrits of up to 80%, eponymous of the mutant strain. Here we report a molecular definition of the regulatory mechanisms governing the dynamic changes in iron balance in Pcm heterozygous mice between 3 and 12 weeks of age. Therein, hepatic and/or duodenal response patterns of iron transporters, such as Trfr, cybrd1 and Slc11a2, defined the transition from early postnatal iron deficiency to iron overload by 12 weeks of age. A significant delay in developmental upregulation of hepcidin (Hamp), the pivotal hormonal regulator of iron homeostasis, correlated with high levels of Fpn1 expression in hepatic Kupffer cells during postnatal development. Conversely, upon upregulation of Hamp expression at 12 weeks of age, Fpn1 expression decreased, indicative of a Hamp-mediated homeostatic loop. Aged cohorts of Pcm mice exhibited low levels of Fpn1 expression in the context of an iron-deficiency erythropoiesis and profound iron sequestration in reticuloendothelial macrophages, duodenum and other tissues. Similar to the anemia of chronic disease, these findings are consistent with decreased iron bioavailability due to sustained downregulation of Fpn1 levels by Hamp. Therefore, iron-deficiency erythropoiesis marks both the beginning and the endpoint of the hematopoietic defects in Pcm mice. However, whereas the embryonic/perinatal anemia results from primary organismal iron deficiency, adult Pcm mice develop anemia due to decreased iron bioavailability despite organismal iron overload. The polycythemia develops at the transition phase between the two disease states, governed by unimpeded Epo signaling. We conclude that regulatory alleles, such as Pcm, with highly dynamic changes in iron balance are ideally suited to interrogate the genetic circuitry regulating iron metabolism.