Two-pore channel 1 (TPC1) is an endosomal Na+/Ca2+-selective channel implicated in membrane trafficking, endosome tubulation, and excitability, but how TPC1 regulates membrane trafficking is unknown. Using TPC1-null human cells, we demonstrate that TPC1 drives transferrin receptor (TfR) trafficking and recycling via Ca2+, and not Na+ fluxes or endosomal pH changes, since channel-targeted Ca2+-buffers inhibited trafficking, whereas a Na+-deficient Ca2+-permeable TPC1 mutant fully supported trafficking. TPC1 was unique since other Ca2+ sources did not support TfR trafficking. TPC1 activity depended on the lipid PI(3,5)P2, since trafficking was impaired by a lipid-insensitive TPC1 or inhibitors of lipid synthesis. Finally, a corollary of this reduced TfR trafficking is an iron-deficiency and storage phenotype in TPC1-deficient HeLa cells and mice. Our findings highlight endosomes as unique Ca2+ stores mobilized by a phosphoinositide-induced TPC1 channel that generates local Ca2+ nanodomains crucial for maintaining TfR trafficking and consequent iron homeostasis.