Iron is an essential nutrient required for the function of all cells, most notably for the production of hemoglobin in red blood cells. Defects in the mechanisms of iron absorption, storage, or utilization can lead to disorders of iron-limited erythropoiesis or iron overload. In an effort to further understand these processes, we have used the zebrafish as a genetic system to study vertebrate iron metabolism. Here we characterized the phenotype of chardonnay (cdy), a zebrafish mutant with hypochromic, microcytic anemia, and positioned the mutant gene on linkage group 11. The cdy gene was isolated by a functional genomics approach in which we used a combination of expression studies, sequence analyses, and radiation hybrid panel mapping. We identified erythroid-specific genes using a whole embryo mRNA in situ hybridization screen and placed these genes on the zebrafish genomic map. One of these genes encoded the iron transporter divalent metal transporter 1 (DMT1) and colocalized with the cdy gene. We identified a nonsense mutation in the cdy allele and demonstrated that, whereas wild-type zebrafish DMT1 protein can transport iron, the truncated protein expressed in cdy mutants is not functional. Our studies further demonstrate the conservation of iron metabolism in vertebrates and suggest the existence of an alternative pathway of intestinal and red blood cell iron uptake.