The objectives of this study were to determine factors affecting fermentation of chili pepper seeds by Bacillus subtilis and to analyze their quality characteristics during fermentation. We profiled the microbiological quality of chili pepper seeds. The numbers of total aerobic bacteria, coliform, and yeast/mold in the chili pepper seeds were 7.03, 4.02, and 4.37 log CFU/g, respectively, but Escherichia coli was not detected from the samples tested. Chili pepper seeds were immersed in 50 mL, 75 mL, 100 mL, 125 mL, or 150 mL of water, inoculated with B. subtilis, and fermented at 25°C, 30°C, 35°C, or 40°C for up to 7 days. The most rapid growth of B. subtilis occurred when chili pepper seeds were mixed with 75 mL of water and fermented at 40°C. The proximate composition of the chili pepper seeds did not change significantly during the fermentation, but the amount of capsaicinoids decreased by approximately 90% after 7 days of fermentation. The total polyphenolic content and antioxidant activity of chili pepper seeds increased during the fermentation.