Phytoene synthase (PSY) is the first committed enzyme in carotenoid biosynthesis, which plays important role in ripen fruit colour. However, the roles of CaPSY genes are not explained detail in ripen pepper fruit colour. In this study, three CaPSY genes (CaPSY1, CaPSY2 and CaPSY3) were identified through basic local alignment search tool (BLAST) in pepper genome. Among them, CaPSY1 was predicted as putative candidate based on relative expression values using five developmental stages of fruit in Zunla-1 cultivar and also in ripen fruits of five contrasting pepper lines. The CaPSY1 was characterised functionally through virus-induced gene silencing (VIGS) in ripen fruits and overexpression in Arabidopsis thaliana (L.) Heynh. Silencing of CaPSY1 gene altered colour with increased lutein and decreased zeaxanthin content in pepper fruits. The transgenic Arabidopsis line CaPSY1 gene showed higher expression of PSY1 gene compared with WT and dwarf phenotype due to reduction of GA3 (gibberellic acid) and higher abscisic acid (ABA) content. Our results confirmed that CaPSY1 gene involved in carotenoid metabolism in ripen pepper fruit and provide clue to develop bright red coloured pepper lines through breeding.