The impact of food science in food production of late has turned to functional foods and nutraceuticals. This interest has shifted the demand for more effective extraction of chilli bioactive compounds, especially capsaicinoids, carotenoids, and phenolics. This chapter outlines recent advances in traditional extraction to more modern approaches, such as ultrasound, microwave-assisted extraction, enzyme-assisted extraction, high-pressure and supercritical-fluid extraction. These processes have all been shown to provide better yield, minimize extraction time, and enhance stability or purity of the end product. Chilli peppers, and especially powdered products, are also susceptible to contamination by spoilage organisms, pathogens and mycotoxigenic fungi. This chapter discusses some of the newest decontamination technologies, namely high-pressure processing (HPP), cold plasma, electron beam irradiation, and mild heat-UV-C combinations. These technologies are assessed based on their microbiological performances, performances on physicochemical and sensory characteristics, and applicability in commercial scales. Concepts from Industry 4.0 and 5.0, such as AI-assisted process improvement, automation, and traceability have been discussed briefly to demonstrate how smart and eco-friendly processing ecosystems of the future will further improve efficiency. The chapter also reviews current trajectories of technology that aim to increase the functional quality and microbial safety of chilli-based products.