Glycine is a key rate-limiting component of heme biosynthesis in erythropoietic cells, where the high intracellular glycine demand is primarily supplied by the glycine transporter 1 (GlyT1). The impact of intracellular glycine restriction after GlyT1 inhibition on hematopoiesis and iron regulation is not well established. We investigated the effects of a potent and selective inhibitor of GlyT1, bitopertin, on erythropoiesis and iron homeostasis in rats. GlyT1 inhibition significantly affected erythroid heme biosynthesis, manifesting as microcytic hypochromic regenerative anemia with a 20% steady-state reduction in hemoglobin. Reduced erythropoietic iron utilization was characterized by down-regulation of the transferrin receptor 1 (TfR1) on reticulocytes and modest increased iron storage in the spleen. Hepatic hepcidin expression was not affected. However, under the condition of reduced heme biosynthesis with reduced iron reutilization and increased storage iron, hepcidin at the lower and higher range of normal showed a striking role in tissue distribution of iron. Rapid formation of iron-positive inclusion bodies (IBs) was observed in circulating reticulocytes, with an ultrastructure of iron-containing polymorphic mitochondrial remnants. IB or mitochondrial iron accumulation was absent in bone marrow erythroblasts. In conclusion, GlyT1 inhibition in rats induced a steady-state microcytic hypochromic regenerative anemia and a species-specific accumulation of uncommitted mitochondrial iron in reticulocytes. Importantly, this glycine-restricted anemia provides no feedback signal for increased systemic iron acquisition and the effects reported are pathogenetically distinct from systemic iron-overload anemias and erythropoietic disorders such as acquired sideroblastic anemia.