An Efficient in vitro regeneration system and an optimized Agrobacterium mediated transformation protocol are described, based on the use of young seedling cotyledons of Capsicum annuum L. Optimal regeneration efficiency can be obtained by cultivating cotyledon explants on media containing 4 mg/L benzyladenine and 0.1 mg/L indolacetic acid. The effect of antibiotics used to eliminate Agrobacteria, as well as the toxic level of some generally used selection agents (kanamycin, geneticin, hygromycin, phosphinotricin and methotrexate) in regenerating pepper tissues were determined. To enable the comparison of different selection markers in identical vector background, a set of binary vectors containing the marker genes for NPTII, HPT, DHFR and BAR respectively, as well as the CaMV 35S promoter/enhancer-GUS chimaeric gene was constructed and introduced into four different Agrobacterium host strains.