BACKGROUND Serum hepcidin concentration is potentially affected by inflammation and iron stores in chronic liver disease (CLD), but little is known about the relationship between hepcidin and the degree of hepatic fibrosis. We investigated the potential role of serum hepcidin as a biomarker of advanced liver disease. METHODS Serum hepcidin was measured in 332 adults with CLD of varying aetiologies, 45 healthy and 50 non-liver disease patient controls. Liver biopsy data were available for 228 CLD subjects. RESULTS Hepcidin was decreased in CLD patients compared with non-liver disease patient controls (P < 0.0001) but not healthy controls, and was lowest in those with cirrhosis (P < 0.0001). Serum hepcidin correlated with hepatic hepcidin mRNA expression in 91 biopsy samples available for genetic analysis (r = 0.68, P < 0.0001). Hepcidin also correlated positively with serum ferritin concentration, transferrin saturation, ALT, serum albumin and haemoglobin, but negatively with serum bilirubin. The hepcidin:ferritin ratio was significantly lower in CLD subjects compared with healthy and disease controls, and decreased with each increase in the stage of fibrosis and siderosis. The hepcidin:ferritin ratio was associated with progressive fibrosis on linear regression, and a value of less than 0.1 was independently associated with cirrhosis on logistic regression analyses (OR 5.54, P < 0.001). Receiver operating characteristic analysis showed the hepcidin:ferritin ratio was able to distinguish between F0 and F4 stages of fibrosis (area under receiver operating characteristic curve = 0.86). CONCLUSIONS The hepcidin:ferritin ratio is reduced in relation to increasing fibrosis in CLD and the use of this ratio may have potential future diagnostic implications as a marker of cirrhosis.