Pungency in Capsicum fruits is due to the accumulation of the alkaloid capsaicin and its analogs. The biosynthesis of capsaicin is restricted to the genus Capsicum and results from the acylation of an aromatic moiety, vanillylamine, by a branched-chain fatty acid. Many of the enzymes involved in capsaicin biosynthesis are not well characterized and the regulation of the pathway is not fully understood. Based on the current pathway model, candidate genes were identified in public databases and the literature, and genetically mapped. A published EST co-localized with the Pun1 locus which is required for the presence of capsaicinoids. This gene, AT3, has been isolated and its nucleotide sequence has been determined in an array of genotypes within the genus. AT3 showed significant similarity to acyltransferases in the BAHD superfamily. The recessive allele at this locus contains a deletion spanning the promoter and first exon of the predicted coding region in every non-pungent accession tested. Transcript and protein expression of AT3 was tissue-specific and developmentally regulated. Virus-induced gene silencing of AT3 resulted in a decrease in the accumulation of capsaicinoids, a phenotype consistent with pun1. In conclusion, gene mapping, allele sequence data, expression profile and silencing analysis collectively indicate that the Pun1 locus in pepper encodes a putative acyltransferase, and the pun1 allele, used in pepper breeding for nearly 50 000 years, results from a large deletion at this locus.