Systemic iron homeostasis dysregulation is primarily associated with inflammation- associated anemia (AI) due to hepcidin up-regulation. Tinospora cordifolia (TC) has shown remarkable anti-inflammatory properties and has been found useful in the treatment of inflammatory disorders. However, the effects and mechanisms of TC on AI have not been studied yet. We conducted in vivo and in vitro studies to evaluate the effect of TC on AI. HPLC studies were also carried out to find out active constituents in TC extract. Model system exhibiting AI was developed by repeated injections of HKBA in Wistar rats. TC treated groups showed significantly higher levels of Hb and RBC count compared to the inflammatory control group. TC treatment showed reduction in the expression of the HAMP (hepcidin) gene in the rat liver. TC extract also inhibited gene expression of inflammatory cytokines (TNF-α, IL-1β) and decreased NO production in RAW 264.7 cells. The HPLC analysis revealed the presence of tinosporaside, which could have synergistically contributed to the above findings. Overall results indicate that TC therapy was able to maintain circulating iron through reduction of inflammatory cytokines and expression of hepcidin in rats.