The architecture of topologically associating domains (TADs) varies across plant genomes. Understanding the functional consequences of this diversity requires insights into the pattern, structure, and function of TADs. Here, we present a comprehensive investigation of the 3D genome organization of pepper (Capsicum annuum) and its association with gene expression and genomic variants. We report the first chromosome-scale long-read genome assembly of pepper and generate Hi-C contact maps for four tissues. The contact maps indicate that 3D structure varies somewhat across tissues, but generally the genome was segregated into subcompartments that were correlated with transcriptional state. In addition, chromosomes were almost continuously spanned by TADs, with the most prominent found in large genomic regions that were rich in retrotransposons. A substantial fraction of TAD boundaries were demarcated by chromatin loops, suggesting loop extrusion is a major mechanism for TAD formation; many of these loops were bordered by genes, especially in highly repetitive regions, resulting in gene clustering in three dimensional space. Integrated analysis of Hi-C profiles and transcriptomes showed that change in 3D chromatin structures (e.g. subcompartments, TADs, and loops) was not the primary mechanism contributing to differential gene expression between tissues, but chromatin structure does play a role in transcription stability. TAD boundaries were significantly enriched for breaks of synteny and depletion of sequence variation, suggesting that TADs constrain patterns of genome structural evolution in plants. Together, our work provides insights into principles of 3D genome folding in large plant genomes and its association with function and evolution.