Background: Chronic atrophic gastritis (CAG) is a chronic inflammatory disease and premalignant lesion of gastric cancer. As an antimicrobial peptide, hepcidin can maintain iron metabolic balance and is susceptible to inflammation. Objectives: The objective of this study was to clarify whether hepcidin is involved in abnormal iron metabolism and ferroptosis during CAG pathogenesis. Methods: Non-atrophic gastritis (NAG) and chronic atrophic gastritis (CAG) patient pathology slides were collected, and related protein expression was detected by immunohistochemical staining. The CAG rat model was established using MNNG combined with an irregular diet. Results: CAG patients and rats exhibited iron deposition in gastric tissue. CAG-induced ferroptosis in the stomach was characterized by decreased GPX4 and FTH levels and increased 4-HNE levels. Hepcidin, which is mainly located in parietal cells, was elevated in CAG gastric tissue. The high gastric level of hepcidin inhibited iron absorption in the duodenum by decreasing the protein expression of DMT1 and FPN1. In addition, the IL-6/STAT3 signaling pathway induced hepcidin production in gastric tissue. Conclusion: Our results showed that the high level of gastric hepcidin induced ferroptosis in the stomach but also inhibited iron absorption in the intestines. Inhibiting hepcidin might be a new strategy for the prevention of CAG in the future.