Pathogenic TMPRSS6 variants impairing matriptase-2 function result in inappropriately high hepcidin levels relative to body iron status, leading to iron refractory iron deficiency anemia (IRIDA). As diagnosing IRIDA can be challenging due to its genotypical and phenotypical heterogeneity, we assessed the transferrin saturation (TSAT)/hepcidin ratio to distinguish IRIDA from multi-causal iron deficiency anemia (IDA). We included 20 IRIDA patients from a registry for rare inherited iron disorders and then enrolled 39 controls with IDA due to other causes. Plasma hepcidin-25 levels were measured by standardized isotope dilution mass spectrometry. IDA controls had not received iron therapy in the last 3 months and C-reactive protein levels were <10.0 mg/L. IRIDA patients had significantly lower TSAT/hepcidin ratios compared to IDA controls, median 0.6%/nM (interquartile range, IQR, 0.4–1.1%/nM) and 16.7%/nM (IQR, 12.0–24.0%/nM), respectively. The area under the curve for the TSAT/hepcidin ratio was 1.000 with 100% sensitivity and specificity (95% confidence intervals 84–100% and 91–100%, respectively) at an optimal cut-off point of 5.6%/nM. The TSAT/hepcidin ratio shows excellent performance in discriminating IRIDA from TMPRSS6-unrelated IDA early in the diagnostic work-up of IDA provided that recent iron therapy and moderate-to-severe inflammation are absent. These observations warrant further exploration in a broader IDA population.