Hot pepper (Capsicum annuum), one of the oldest domesticated crops in the Americas, is the most widely grown spice crop in the world. We report whole-genome sequencing and assembly of the hot pepper (Mexican landrace of Capsicum annuum cv. CM334) at 186.6× coverage. We also report resequencing of two cultivated peppers and de novo sequencing of the wild species Capsicum chinense. The genome size of the hot pepper was approximately fourfold larger than that of its close relative tomato, and the genome showed an accumulation of Gypsy and Caulimoviridae family elements. Integrative genomic and transcriptomic analyses suggested that change in gene expression and neofunctionalization of capsaicin synthase have shaped capsaicinoid biosynthesis. We found differential molecular patterns of ripening regulators and ethylene synthesis in hot pepper and tomato. The reference genome will serve as a platform for improving the nutritional and medicinal values of Capsicum species.