Hepcidin is known to play an important role in iron metabolism and innate immunity as both a major regulator of iron homeostasis and, an antimicrobial peptide. In this study, we attempted to characterize the transcriptional and antimicrobial properties of hepcidin-1 in olive flounder (OF-hepcidin-1). Briefly, the gene expression level of OF-hepcidin-1 in olive flounder infected with viral hemorrhage septicemia virus (VHSV), Streptococcus parauberis, and Edwardsiella piscicida was quantified using real-time polymerase chain reaction (PCR) analysis. The antimicrobial activity and therapeutic effects of synthetic OF-hepcidin-1 were tested against several fish pathogens. The results showed that the expression of OF-hepcidin-1 mRNA was dramatically elevated in the liver, spleen, head kidney, and blood of infected olive flounder from 6 h post-challenge (hpc) to 7 days post-challenge (dpc), thus indicating its important role in innate immunity. Of note, a 133-fold increase in OF-hepcidin-1 mRNA was found in the blood of fish infected with VHSV at 6 hpc, while the VHSV concentration in the blood was near the border of detection limit; this indicates that OF-hepcidin-1 mRNA could be potentially used as an early infection bioindicator. OF-hepcidin-1 gene expression was significantly correlated with OF-IL-6 expression (p < 0.05), indicating that IL-6 might be closely involved in hepcidin expression in fish. Synthetic OF-hepcidin-1 exhibited antimicrobial activity against various fish pathogens including VHSV at a minimum dose of 50 μM fish−1. Further, OF-hepcidin-1 treatment in olive flounder infected with S. parauberis and VHSV showed a significantly lower infection rate and mortality (relative survival rate of 22.2% and 36.4%, respectively) than the control group, which suggests its potential usefulness in disease control applications.