We used two genes, TMV-CP and PPI1 (pepper-PMMV interaction 1 transcription factor), to transform commercially important chili pepper (Capsicum annuum) inbred lines (P915, P409) by means of Agrobacterium co-culture. Eighteen independently transformed T0 plants were obtained. The most critical point in the pepper transformation protocol was the selection of shoots growing on calli--referred to as callus-mediated shoot formation (indirect shooting)--because shoots not grown from the callus (direct shooting from the wounded surface) developed into non-transformants. Selection of the correct right callus type also proved to be an important requirement for obtaining transformed peppers. Six different types of callus developed during the selection process. Shoots regenerated from two of these types, while one type regenerated significantly more shoots than the other types, suggesting that the capacity for shoot formation is callus type-specific. Although the transformation rate was low, transformation via callus-mediated shoot formation proved to be reproducible and was confirmed by Southern and Northern blot analyses. Based on the experimental data, we have succeeded in developing a new protocol for the selection and transformation of pepper and expect that it will be used in the future for pepper transformation.