Capsicum annuum and Capsicum frutescens are the most widely cultivated species in Malaysia. Vegetable processing wastes, such as seeds, have been used as an alternative resource to manage waste and as a food source in the food industry. This research aimed to determine the potential of chilli seed powder as functional ingredient. Following this analysis, the proximate, phytic acid, and mineral were conducted for chemical analysis. Water and oil holding capacity and colour analysis were done for the physical study of chilli seed powder. Results showed that the crude fat, crude fibre, and protein contents were 22.24±0.50 g/100 g, 30.87±1.59 g/100 g and 17.57±0.28 g/100 g for C. annuum seed powder and 17.68±0.44 g/100 g, 24.07±1.57 g/100 g, 16.1±0.48 g/100 g for C. frutescens seed powder, respectively. Both chilli seed powders displayed low amounts of mineral contents, such as calcium (Ca), sodium (Na), magnesium (Mg) and zinc (Zn). In addition, C. frutescens seed powders exhibited phytic acid content (6.03±0.36 g/100 g) and red C. annuum seed powder (8.64±1.96 g/100 g). The low amount of phytic acid in both samples may be due to the low amount of minerals. The L* values of C. frutescens seed powder (68.21±0.35) were significantly higher than that of C. annuum seed powder (66.17±0.35), indicating the lightness in colour of both samples. As the L* value increased, the sample became lighter in colour. Positive a* and b* values led to a yellowish colour. The water- holding capacity (WHC) and oil-holding capacity (OHC) were 2.25±0.38 and 0.87±0.07, for C. annuum seed powder and 1.40±0.55 and 0.43±0.75 for C. frutescens seed powder, respectively. Both powders exhibited low averages of WHC and OHC due to the low amount of protein. Hence, C. annuum and C. frutescens seed powders may be used to improve colour for the development of food products.