This study investigates the relationship between nitrogen fertilization and pepper fruit color by employing five different nitrogen treatments (N1: 750 kg/hm2, N2: 562.5 kg/hm2, N3: 375 kg/hm2, N4: 187.5, and N0: 0 kg/hm2). Fruits were harvested at 30 (S1: green ripening stage), 45 (S2: color transition stage), and 60 days (S3: red ripening stage) after flowering. Subsequently, pigment content, carotenoid component content, carotenoid enzyme activity, and transcriptome sequence were analyzed, and CA12g04950 function was validated through virus-induced gene silencing (VIGS). The results indicate that a reduction in nitrogen application led to an earlier onset of fruit color breakdown, and increased the contents of total carotenoid, capsanthin, phytoene and PSY (phytoene synthase) activity, LCYB (lycopene β-cyclase) activity and CCS (capsanthin/capsorubin synthase) activity. The analysis of different expression genes indicated that the most differently expressed genes were enriched in the N1 vs. N4 comparison, with 18 genes involved in carotenoid metabolism and 16 genes involved in nitrogen metabolism. Most DE genes were enriched in the pathways of photosynthesis, porphyrin, carotenoid biosynthesis, seleno-compounds, and nitrogen metabolism. There were numerous differential transcription factor families, including ERF, bHLH, MYB, C2H2, and NAC. Pearson correlation analysis revealed a significant positive correlation between CA12g04950 expression and 11 carotenoid genes in the N4 treatment. Subsequent silencing of CA12g04950 using VIGS resulted in delayed color ripening while a significant decrease in total carotenoid content and the expression levels of carotenoid genes. In conclusion, nitrogen reduction led to an increase in carotenoid content in pigment pepper fruits. Furthermore, under nitrogen reduction, CA12g04950 positively influenced the redness of the fruits.