Amidated and nonamidated gastrins elicit different biological effects via distinct receptors in different tissues. Amidated gastrin 17 stimulates gastric acid secretion and the development of gastric carcinoids, whereas glycine-extended gastrin 17 stimulates proliferation of the colonic mucosa and the development of colorectal cancers. Because glycine-extended gastrin 17 binds two ferric ions with high affinity (Baldwin, G. S., Curtain, C. C., and Sawyer, W. H. (2001) Biochemistry 40, 10741-10746), we have investigated the identity of the iron ligands and the role of ferric ions in biological activity. Here we report the solution structure of glycine-extended gastrin 17, determined by NMR spectroscopy. The spectral changes observed upon the addition of ferric ions revealed that Glu7 acted as a ligand at the first ferric binding site, and that Glu8 and Glu9 acted as ligands at the second ferric ion binding site. Fluorescence quenching experiments confirmed that a GglyE7A mutant bound only one ferric ion. The inability of this mutant to stimulate proliferation or migration in the IMGE-5 cell line and the observation that the iron chelator desferrioxamine selectively blocked the effects of glycine-extended gastrin 17 indicated that binding of a ferric ion to Glu7 was essential for biological activity. This is the first report of an essential role for a metal ion in the action of a hormone.