Objectives To investigate potential usefulness of serum hepcidin in the diagnosis of iron overload in children with beta-thalassemia. Methods A study was conducted on 30 thalassemia major (TM), 30 thalassemia intermedia (TI) and 60 healthy children as controls. Serum hepcidin was measured by Human Hepcidin, ELISA Kit. Results beta-thalassemia patients had a higher serum hepcidin compared to the controls (p < 0.001). TM group had higher hepcidin and ferritin compared to the TI group (p = 0.034; < 0.001, respectively). Among controls, hepcidin did not correlate with age (r = 0.225, p = 0.084). Among beta-thalassemia patients, it correlated positively with age (r = 0.4; p = 0.001), disease duration (r = 0.5; p < 0.001), transfusion frequency (r = 0.35; p = 0.007), total number of transfusions (r = 0.4; p = 0.003), and ferritin (r = 0.3; p = 0.027). Total hemoglobin and serum ferritin were significantly related to hepcidin, which tended to increase by 0.514 ng/ml with each 1 g/dl rise in hemoglobin (p = 0.023) and by 0.002 ng/ml with each 1 ng/ml rise in serum ferritin (p = 0.002). Iron overload [serum ferritin (SF) = 1500 ng/ml] was independently associated with TM (p = 0.001) and elevated serum hepcidin (p = 0.02). The overall predictability of serum hepcidin in severe iron overload was statistically significant when compared to hepcidin to serum ferritin ratio. Conclusions Serum hepcidin is elevated in children with beta-thalassemia; but this elevation is more evident in TM patients with severe iron overload. Thus, hepcidin can be a potential marker of severe iron overload in patients with TM. Further studies are recommended to compare serum hepcidin and serum ferritin in the prediction of severe iron overload in steady state and during infection or inflammation.