Chile seeds are not the source of the pungency. The "heat" is produced by alkaloid compounds call capsaicinoids, which are located in glands along the fruit's inner wall, or placenta. If you cut the fruit open you can tell how hot a Chile will be. If the placenta is a bright orange, the fruit will be hot. If the color is very pale, the fruit will be on the mild side.

The pungency is affected by the genetic makeup of the variety, the weather, growing conditions, and age of the fruit. Plant breeders can select for desired ranges of pungency, but any stress to the plant such as a few hot days or less precipitation, can increase the capsaicinoid content and cause the pungency to increase.

Chile spiciness is measured in terms of Scoville Heat Units. Heat is felt as a result of the irritation of the pain and temperature receptors in the mouth, nose, and stomach by the capsaicinoids. The physical reactions of vasodilatation, sweating and flushing, result , and the brain causes the release of endorphins which give the body a sense of pleasure. This can cause people to become "addicted" to chiles.