Responses to drought within a single species may vary based on plant developmental stage, drought severity, and the avoidance or tolerance mechanisms employed. Early drought stress can restrict emergence and seedling growth. Thus, in areas where water availability is limited, rapid germination leading to early plant establishment may be beneficial. Alternatively, germination without sufficient water to support the seedling may lead to early senescence, so reduced germination under low moisture conditions may be adaptive at the level of the population. We studied the germination response to osmotic stress of diverse chile pepper germplasm collected in southern Mexico from varied ecozones, cultivation systems, and of named landraces. Drought stress was simulated using polyethylene glycol solutions. Overall, survival time analysis revealed delayed germination at the 20% concentration of PEG across all ecozones. The effect was most pronounced in the genotypes from hotter, drier ecozones. Additionally, accessions from wetter and cooler ecozones had the fastest rate of germination. Moreover, accessions of the landraces Costeño Rojo and Tusta germinated more slowly and incompletely if sourced from a drier ecozone than a wetter one, indicating that slower, reduced germination under drought stress may be an adaptive avoidance mechanism. Significant differences were also observed between named landraces, with more domesticated types from intensive cultivation systems nearly always germinating faster than small-fruited backyard- or wild-types, perhaps due to the fact that the smaller-fruited accessions may have undergone less selection. Thus, we conclude that there is evidence of local adaptation to both ecozone of origin and source cultivation system in germination characteristics of diverse chile peppers.