ABSTRACT Despite the significance and growing global interest, limited comprehensive comparative investigation has simultaneously evaluated both nutritional composition and biological activities using standardized methodologies within a single analytical framework. This fragmented approach prevents identification of species‐specific advantages and limits evidence‐based recommendations for functional food or pharmaceutical applications. The current comparative study evaluated nutritional composition, phytochemical constituents, and biological activities of Capsicum frutescens and Capsicum annuum fruits. Proximate analysis revealed similar moisture content (71.49% ± 0.69% vs. 73.51% ± 0.64%) but distinct nutritional profiles: C. frutescens contained higher protein (1.88% ± 0.06% vs. 1.52% ± 0.01%, p = 0.004), while C. annuum showed elevated fiber (5.72% ± 0.03% vs. 5.18% ± 0.06%, p = 0.001). Mineral profiling demonstrated complementary patterns with C. frutescens richer in iron (4.91 vs. 3.18 mg/100 g), potassium (5.21 vs. 4.41 mg/100 g), and zinc (0.20 vs. 0.10 mg/100 g), whereas C. annuum contained higher calcium (6.21 vs. 4.91 mg/100 g) and phosphorus (5.78 vs. 4.06 mg/100 g). Methanol extracts (yield: 8.7% vs. 6.3% w/w) from both species contained alkaloids, glycosides, terpenoids, flavonoids, saponins, steroids, and tannins. While qualitative tests confirmed multiple phytochemical classes, individual compound identification was not performed due to resource constraints. C. frutescens exhibited 3.5‐fold higher phenolic content (18.85 ± 0.52 vs. 5.36 ± 0.28 μg gallic acid equivalents, GAE/mg, p < 0.001), while C. annuum showed elevated flavonoids (37.8% ± 1.2% vs. 20.73% ± 0.85 g rutin equivalents, RE, p < 0.001) and saponins (18.6% ± 0.7% vs. 13.3% ± 0.5 g diosgenin equivalents, DE, p = 0.002). Biological activity testing revealed C. frutescens demonstrated 2.5‐fold superior antioxidant capacity (2,2‐diphenyl‐1‐picrylhydrazyl, DPPH Half Maximal Inhibitory Concentration, IC 50 : 111.96 ± 3.24 vs. 284.57 ± 5.87 μg/mL, p < 0.001), stronger antibacterial efficacy (inhibition zones: 8–22 vs. 7–14 mm), and two‐fold greater cytotoxic potential in the brine shrimp lethality assay (Lethal Concentration 50%, LC 50 : 29.24 ± 1.15 vs. 59.37 ± 2.34 μg/mL, p < 0.001), though validation in human cancer cell lines is necessary to confirm anticancer potential. Both species exhibited equivalent anti‐arthritic activity (99.57% ± 0.24% vs. 99.42% ± 0.31%), comparable to diclofenac sodium (99.78% ± 0.18%, p = 0.712). These findings establish species‐specific advantages supporting their complementary use in functional food and nutraceutical development, though further studies including individual compound identification via HPLC‐DAD‐MS/MS and in vivo validation are necessary to confirm therapeutic applications.