Plasma iron circulates bound to transferrin (Trf), which solubilizes the ferric ion and attenuates its reactivity. Diferric Trf interacts with cell-surface Trf receptor (Trfr) to undergo receptor-mediated endocytosis into specialized endosomes. Endosomal acidification leads to iron release, and iron is transported out of the endosome through the activity of divalent metal transporter 1 (DMT1, formerly Nramp2), a transmembrane iron transporter that functions only at low pH. Trf and Trfr then return to the cell surface for reuse, completing a highly efficient cycle. Although the Trf cycle is assumed to be the general mechanism for cellular iron uptake, this has not been validated experimentally. Mice with hypotransferrinaemia (hpx) have little or no plasma Trf. They have severe anaemia, indicating that the Trf cycle is essential for iron uptake by erythroid cells. Other hpx tissues, however, are generally normal, and there is a paradoxical increase in intestinal iron absorption and iron storage. To test the hypothesis that the Trf cycle has unique importance for erythropoiesis, we disrupted the Trfr gene in mice. This results in elimination of the Trf cycle, but leaves other Trf functions intact. Mice lacking Trfr have a more severe phenotype than hpx mice, affecting both erythropoiesis and neurologic development. Furthermore, haploinsufficiency for Trfr results in impaired erythroid development and abnormal iron homeostasis.