Background Hepcidin is an iron regulatory peptide produced by the liver in response to inflammation and elevated systemic iron. Recent studies suggest that circulating monocytes and resident liver macrophages - Kupffer cells - may influence both basal and inflammatory expression of hepcidin. Design and Methods We used an in vitro co-culture model to investigate hepatocyte hepcidin regulation in the presence of activated THP1 macrophages. HuH7 hepatoma cells were co-cultured with differentiated THP1 macrophages for 24 h prior to the measurement of HuH7 hepcidin (HAMP) mRNA expression using quantitative polymerase chain reaction; and HAMP promoter activity using a luciferase reporter assay. Luciferase assays were performed using the wild type HAMP promoter, and constructs containing mutations in BMP/SMAD4, STAT3, C/EBP and E-BOX response elements. Neutralizing antibodies against interleukin-6, interleukin-1 beta, and the bone morphogenetic protein inhibitor noggin were used to identify the macrophage-derived cytokines involved in the regulation of HAMP expression. Results Co-culturing HuH7 cells with differentiated THP1 cells induced HAMP promoter activity and endogenous HAMP mRNA expression maximally after 24 h. This induction was fully neutralized in the presence of an interleukin-1 beta antibody, and fully attenuated by mutations of the proximal C/EBP or BMP/SMAD4 response elements. Conclusions Our data suggest that the interleukin-1 beta and bone morphogenetic protein signaling pathways are central to the regulation of HAMP expression by macrophages in this co-culture model.