A gearbox is an essential component of an automatic transplanter to transmit engine power to the transplanter components. It is necessary to find the appropriate gearbox dimensions and materials for the pepper transplanter to minimize transmission losses. Therefore, the objectives of this research were to simulate the power transmission efficiency of the gearbox, and to determine a suitable number of stages, and materials and the dimensions of the spur gears. A 2.6 kW gasoline engine was considered as the prime source to power the entire transplanter. The available maximum length between the engine and transplanter subsystem was 422 mm. By considering design issues, a simulation model was created to determine the efficiency of the pepper transplanter gearbox, including various types of mechanical losses in the gearing system. Three different modules (1, 2, and 3 mm) and two materials were used to evaluate the effects on transmission. The analysis results indicated that the gearbox transmission efficiency levels of seven to twelve stages were in the range of 93.0–98.7%, whereas the eight-stage gearbox yielded the maximum efficiency of 98.7%, greater than our target efficiency of 98.0%. Therefore, an eight-stage gearbox was selected for power transmission to the components. The power transmission simulation results showed that the overall efficiency from engine to transplanting mechanism shaft varied in range of 95.2–95.9% owing to contact of the gear meshes. The analysis results also indicated that the 25CrMo4 carbon steel material with a 2-mm module gear was appropriate for the pepper transplanter. The analysis in this paper can be used as reference in the design of pepper transplanter gears and gearboxes with suitable material properties to provide the desired efficiency.