Iron homeostasis is essential for health; moreover, hepcidin-deficiency results in iron overload in both hereditary hemochromatosis and iron-loading anemia. Here, we identified iron modulators by functionally screening hepcidin agonists using a library of 640 FDA-approved drugs in human hepatic Huh7 cells. We validated the results in C57BL/6J mice and a mouse model of hemochromatosis (Hfe-/- mice). Our screen revealed that the anti-rheumatoid arthritis drug auranofin (AUR) potently upregulates hepcidin expression. Interestingly, we found that canonical signaling pathways that regulate iron, including the Bmp/Smad and IL-6/Jak2/Stat3 pathways, play indispensable roles in mediating AUR's effects. In addition, AUR induces IL-6 via the NF-κB pathway. In C57BL/6J mice, acute treatment with 5 mg/kg AUR activated hepatic IL-6/hepcidin signaling and decreased serum iron and transferrin saturation. Whereas chronically treating male Hfe-/- mice with 5 mg/kg AUR activated hepatic IL-6/hepcidin signaling, decreasing systemic iron overload, but less effective in females. Further analyses revealed that estrogen reduced the ability of AUR to induce IL-6/hepcidin signaling in Huh7 cells, providing a mechanistic explanation for ineffectiveness of AUR in female Hfe-/- mice. Notably, high-dose AUR (25 mg/kg) induces ferroptosis and causes lipid peroxidation through inhibition of thioredoxin reductase (TXNRD) activity. We demonstrate the ferroptosis inhibitor ferrostatin significantly protects liver toxicity induced by high-dose AUR without comprising its beneficial effect on iron metabolism. In conclusion, our findings provide compelling evidence that TXNRD is a key regulator of ferroptosis, and AUR is a novel activator of hepcidin and ferroptosis via distinct mechanisms, suggesting a promising approach for treating hemochromatosis and hepcidin-deficiency related disorders.