We established a collection of 142 Capsicum genotypes from different geographical areas of Ethiopia with the aim of capturing genetic diversity. Morphological traits and high-resolution melting analysis distinguished one Capsicum baccatum, nine Capsicum frutescens and 132 Capsicum annuum accessions in the collection. Measurement of plant growth parameters revealed variation between germplasms in parameters including plant height, stem thickness, internode length, number of side branches, fruit width, and fruit length. Broad-sense heritability was maximum for fruit weight, followed by length and width of leaves. We used genotyping by sequencing (GBS) to identify single-nucleotide polymorphisms (SNPs) in the panel of 142 Capsicum germplasms and found 2,831,791 genome-wide SNP markers. Among these, we selected 53,284 high-quality SNPs and used them to estimate the level of genetic diversity, population structure, and phylogenetic relationships. From model-based ancestry analysis, the phylogenetic tree and principal-coordinate analysis (PCoA), we identified two distinct genetic populations: one comprising 132 C. annuum accessions and the other comprising the nine C. frutescens accessions. GWAS analysis detected 509 SNP markers that were significantly associated with fruit-, stem- and leaf-related traits. This is the first comprehensive report of the analysis of genetic variation in Ethiopian Capsicum species involving a large number of accessions. The results will help breeders utilize the germplasm collection to improve existing commercial cultivars.