Premise Capsicum annuum (Solanaceae) was originally domesticated in Mexico, where wild (C. annuum var. glabriusculum) and cultivated (C. annuum var. annuum) chile pepper populations (>60 landraces) are common, and wild‐resembling individuals (hereafter semiwild) grow spontaneously in anthropogenic environments. Here we analyze the role of elevation and domestication gradients in shaping the genetic diversity in C. annuum from the state of Oaxaca, Mexico. Methods We collected samples of 341 individuals from 28 populations, corresponding to wild, semiwild (C. annuum var. glabriusculum) and cultivated C. annuum, and closely related species Capsicum frutescens and C. chinense. From the genetic variation of 10 simple sequence repeat (SSR) loci, we assessed the population genetic structure, inbreeding, and gene flow through variance distribution analyses, genetic clustering, and connectivity estimations. Results Genetic diversity (HE) did not differ across domestication levels. However, inbreeding coefficients were higher in semiwild and cultivated chiles than in wild populations. We found evidence for gene flow between wild populations and cultivated landraces along the coast. Genetic structure analysis revealed strong differentiation between most highland and lowland landraces. Conclusions Gene flow between wild and domesticated populations may be mediated by backyards and smallholder farms, while mating systems may facilitate gene flow between landraces and semiwild populations. Domestication and elevation may overlap in their influence on genetic differentiation. Lowland Gui'ña dani clustered with highland landraces perhaps due to the social history of the Zapotec peoples. In situ conservation may play an important role in preserving semiwild populations and private alleles found in landraces.