Investigations were carried out to unravel  the nature and magnitude of gene effects in VN-2 x Jwala, VN-2 x Arka Lohit, Hissar Shakti x PMR-21, Byadagi Kaddi  x Arka Lohit and Byadagi Dabbi  x LCA-312 crosses for quantitative characters in chilli through generation mean analysis. For VN-2 x Arka Lohit, Byadagi Kaddi x Arka Lohit and Byadagi Dabbi x LCA-312  crosses higher magnitude of dominance gene effect was observed as compared to additive gene effect, while additive x additive (i) component was more predominant than other types of interactions. Although, the dominance gene effects were predominant, it cannot be exploited because of the opposite signs of h and i gene effects in all the crosses except Dabbi x LCA 312 (9623) cross. Whenever these gene effects (h and i) co-existed, it indicates the presence of duplicate epistasis. The presence of significant amounts of all types of gene actions like additive, dominance and epistasis for most of the important traits has indicated that a method designed to utilize all of them such as recurrent selection, multiple cross or diallel selective mating system of Jensen (1970) has to be adopted in the breeding programme.