Ferroportin (Fpn) is the only known iron exporter in vertebrates. Hepcidin, a peptide secreted by the liver in response to iron or inflammation, binds to Fpn inducing its internalization and degradation. We show that after binding of hepcidin, Fpn is tyrosine phosphorylated at the plasma membrane. Mutants of human Fpn that do not get internalized or are internalized slowly, show either absent or impaired phosphorylation. We identify adjacent tyrosines as the phosphorylation sites and show that mutation of both tyrosines prevents hepcidin-mediated Fpn internalization. Once internalized, Fpn is dephosphorylated and subsequently ubiquitinated. An inability to ubiquitinate Fpn does not prevent hepcidin-induced internalization but inhibits the degradation of Fpn. Ubiquitinated Fpn is trafficked through the multivesicular body pathway en route to degradation in the late endosome/lysosome. Depletion of proteins involved in multivesicular body trafficking (ESCRT proteins), by siRNA, reduces the trafficking of Fpn-GFP to the lysosome.