Chili (Capsicum annuum L.) is an important functional food due to its main bioactive compound, capsaicin, and other nutritional phytochemicals. However, very few studies have been conducted to develop hybrids with a high content of nutritional phytochemicals. The present study involving six parents was conducted to identify superior hybrids with higher nutritional quality based on combining ability and heterosis following Griffing’s diallel Method II Model I. A broad spectrum of genetic variation among the six parents and fifteen F1 hybrids was confirmed by analysis of variance. (H1/D)0.5 value indicated that partial dominance gene action controlled all the traits except capsaicin and total phenolic content. Based on general combining ability (GCA) results, parent P3 (PLP-2s) was the best general combiner for all the traits except K and Na, followed by the parents P6 (BU Capsicum 1), P5 (Morich-8), P4 (Chili Japan) and P1 (Red Chili). Specific combining ability (SCA), along with heterotic response, revealed that the F1 hybrid P3×P6 (PLP-2s × BU Capsicum 1) was the best hybrid, followed by the hybrids P4×P6 (Chili Japan × BU Capsicum 1) and P3×P4 (PLP-2s × Chili Japan), as they exhibited superiority for major nutritional components, such as capsaicin and ascorbic acid. Ultimately, the subsequent selection of the F1 hybrids would help develop better nutritional-quality hybrids.