The fruit of Capsicum plants have a variety of names depending on place and type. They are commonly called chili pepper, red or green pepper in North America, or sweet pepper in Britain, and typically just "capsicum" in Australia, New Zealand, and India. The large mild form is called bell pepper in the U.S. and Canada. They are called paprika in some other countries (although paprika can also refer to the powdered spice made from various capsicum fruit). The generic name is derived from the Greek word (kapto), meaning "to bite" or "to swallow." The name "pepper" came into use because of their similar flavour to the condiment black pepper, Piper nigrum, although there is no botanical relationship with this plant, or with Sichuan pepper.

The original Mexican term, chilli (now chile in Mexico) came from the Nahuatl word chilli or xilli, referring to a larger Capsicum variety cultivated at least since 3000 BC, as evidenced by remains found in pottery from Puebla and Oaxaca.