Due to its wide use in nutritional therapy, a capsicum oleoresin extraction from hot chilli pepper was optimized using ultrasound assisted extraction. Under optimal conditions, a 0.1g sample in 10mL of a 20% water in methanol solution was extracted at 50°C for 20min to remove phytochemicals consisting of oleoresin, phenolics, carotenoids, flavonoids, capsaicinoids (pungency level), reducing sugars. Antioxidant and antidiabetic activities of the crude extracts from 14 chilli pepper varieties were examined. The antioxidant and antidiabetic activities of some phenolic compounds were also tested individually. The results showed that these chilli pepper samples are a rich source of phytochemicals with antioxidant and antidiabetic activities. High antioxidant activity of the extracts was evaluated using the 2,2-diphenyl-1-picrylhydrazyl, N,N-dimethyl-p-phenylenediamine dihydrochloride, 2,2'-azino-bis(3-ethylbenzothiazolin-6-sulfonic acid) and ferric ion reducing antioxidant power assays. The crude extracts had a lower level of sugars induced by the inhibitory effect of α-amylase activity. Thus, their enzymatic inhibitory effect might have resulted from a synergism among the phytochemicals concerned. Therefore, a diet with this type of food may have beneficial health effects.