Chilli (Capsicum spp.) is essential to Sri Lanka’s agricultural economy and household nutrition. However, the sector faces ongoing challenges, including low dry chilli productivity, pest and disease pressures particularly from the chilli leaf curl complex and a heavy dependence on expensive imported dried chillies. To tackle these issues, the Sri Lankan Department of Agriculture (DOA) and the Field Crops Research & D evelopment I nstitute ( FCRDI) developed MICH Hy1, a high-yielding, p est-resistant hybrid chilli variety suited to local conditions. From 2019 to 2021, the ‘KOPIA Chilli Project’ initiated a participatory hybrid seed production initiative in Kothmale, involving farmers in a decentralized seed system utilizing insect-proof net houses and capacity-building programs. This collaborative approach has successfully enhanced seed quality, improved farmers’ incomes, increased the availability of affordable hybrid seeds, and reduced reliance on imported varieties. The initiative highlights the potential of farmer-led hybrid seed systems to strengthen national seed security, empower rural communities, and promote sustainable chilli cultivation in Sri Lanka.