Next generation sequencing technologies have proven to be a rapid and cost-effective means to assemble and characterize gene content and identify molecular markers in various organisms. Pepper (Capsicum annuum L., Solanaceae), is a major staple vegetable crop, which is economically important and has worldwide distribution. High-throughput transcriptome profiling of two pepper cultivars, Mandarin and Blackcluster using 454 GS-FLX pyrosequencing yielded 279,221 and 316,357 sequenced reads with a total 120.44 and 142.54 Mb of sequence data (average read length of 431 and 450 nucleotides). These reads resulted from 17,525 and 16,341 ‘isogroups’ and were assembled into 19,388 and 18,057 isotigs, and 22,217 and 13,153 singletons for both the cultivars, respectively. Assembled sequences were annotated functionally based on homology to genes in multiple public databases. Detailed sequence variants analysis identified a total of 9,701 and 12,741 potential SNPs for both cultivars, which eventually resulted in 1,025 and 1,059 genotype specific SNPs, for both the varieties, respectively. These markers for pepper will be highly valuable for marker-assisted breeding and other genetic studies.