Background: In chronic diseases characterized by persistent inflammation, anemia of chronic disease (ACD) and iron deficiency anemia (IDA) are commonly encountered forms of anemia and can often co-occur. In such situations, the conventional iron status tests used for differential diagnosis are influenced by inflammation, reducing their diagnostic accuracy. The primary objective of this study was to assess the significance of hepcidin as a crucial diagnostic marker for ACD and to investigate the correlation between hepcidin and inflammation-related indicators. Furthermore, a significant secondary aim of this research was to ascertain the diagnostic role of novel biochemical markers, specifically soluble transferrin receptor (sTfR) and the derived sTfR/log ferritin index (sTfR-F index). Methods and Results: This study was conducted at the Laboratory Service of the University Hospital Center "Mother Teresa" and included a cohort of 187 subjects, comprising 156 patients (83 females and 73 males) who were admitted to and received treatment at the Rheumatology and Cardiology Departments of the "Mother Teresa" University Hospital Center in Tirana. Additionally, 31 individuals without anemia and inflammatory conditions were included as a control group. All subjects incorporated into the study were classified into five distinct groups based on a comprehensive analysis of their complete blood profiles, iron status, and inflammation-related biomarkers: IDA, ACD, ACD+IDA, RA/CHF patients without anemia, and the control group without anemia. The comparison between groups showed that the mean values of pro-hepcidin, TNFα, IL6, Hs-PCR, and ferritin are significantly decreased in IDA vs. ACD, while sTFR and sTfR-F index are significantly increased. In comparing ACD vs. ACD+IDA groups, ferritin increased significantly in the ACD group, while sTFR and sTfR-F index decreased significantly in ACD, compared to the ACD+IDA group. The ROC curves analysis of the biochemical parameters selected for the comparison of ACD vs IDA showed that the pro-hepcidin test is a perfect test for the differential diagnosis of ACD vs. IDA. The suggested cut-off value for pro-hepcidin was ≥153 ng/ml, yielding a sensitivity of 100% and a specificity of 100% for the diagnosis of ACD. As regards sTFR, the suggested cut-off value for the diagnosis of IDA vs. ACD was≥ 4.9 µg/ml resulting in 84% sensitivity and 100% specificity. The sTfR-F index was also very useful for the diagnosis of IDA vs. ACD: for a cut-off value of ≥2.06, the sensitivity was 90% and the specificity was 96%. sTfR resulted in a good test for the diagnosis of ACD+IDA vs. ACD: the cut-off value was ≥ 3.7µ/ml, the sensitivity was 92.3% and the specificity was 93.2%. Similarly, the parameter sTfR-F index resulted in a very good test for the diagnosis of ACD+IDA vs. ACD: for the suggested cut-off value of ≥2.3, the sensitivity was 92.3% and the specificity was 100%. Conclusion: As a result of the study, it was found that the pro-hepcidin test was a highly accurate test for distinguishing between ACD and IDA. Meanwhile, sTfR and the sTfR-F index proved to be excellent indicators for the differential diagnosis of IDA in chronic inflammatory conditions.