BACKGROUND: Chile peppers (Capsicum spp.) are among the most important horticultural crops in the world due to their number of uses. They are considered a major cultural and economic crop in the state of New Mexico in the United States. Evaluating genetic diversity in current New Mexican germplasm would facilitate genetic improvement for different traits. This study assessed genetic diversity, population structure, and linkage disequilibrium (LD) among 165 chile pepper genotypes using single nucleotide polymorphism (SNP) markers derived from genotyping-by-sequencing (GBS). RESULTS: A GBS approach identified 66,750 high-quality SNP markers with known map positions distributed across the 12 chromosomes of Capsicum. Principal components analysis revealed four distinct clusters based on species. Neighbor-joining phylogenetic analysis among New Mexico State University (NMSU) chile pepper cultivars showed two main clusters, where the C. annuum genotypes grouped together based on fruit or pod type. A Bayesian clustering approach for the Capsicum population inferred K = 2 as the optimal number of clusters, where the C. chinense and C. frutescens grouped in a single cluster. Analysis of molecular variance revealed majority of variation to be between the Capsicum species (76.08 %). Extensive LD decay (~ 5.59 Mb) across the whole Capsicum population was observed, demonstrating that a lower number of markers would be required for implementing genome wide association studies for different traits in New Mexican type chile peppers. Tajima's D values demonstrated positive selection, population bottleneck, and balancing selection for the New Mexico Capsicum population. Genetic diversity for the New Mexican chile peppers was relatively low, indicating the need to introduce new alleles in the breeding program to broaden the genetic base of current germplasm. CONCLUSIONS: Genetic diversity among New Mexican chile peppers was evaluated using GBS-derived SNP markers and genetic relatedness on the species level was observed. Introducing novel alleles from other breeding programs or from wild species could help increase diversity in current germplasm. We present valuable information for future association mapping and genomic selection for different traits for New Mexican chile peppers for genetic improvement through marker-assisted breeding.