Chilli (Capsicum annuum L.) is one of the important commercial crops of India. It is a crop of tropical and sub-tropical regions and requires a warm humid climate. Though, chilli can be grown on many variety of soils, well drained loamy soils, rich in organic matter are best suited for the cultivation. There are more than fifty chilli varieties grown in India. There was marginal difference in marketing costs incurred by the farmers among the various districts and overall. The per quintal cost of marketing incurred by farmers in Raichur district (` 112.65) was comparatively higher than that of Bijapur (` 110.02 and Gulbarga (` 103.80) districts. The total cost incurred by commission agent was more in Raichur market followed by Gulbarga and Bijapur, the total cost incurred by wholesaler was more in Gulbarga compared to Bijapur and Raichur. The total cost incurred by retailers was highest in Bijapur (` 47.20) followed by Gulbarga (` 46.80) and Raichur (` 44.20). The magnitude of price spread in channel I was more in Gulbarga (818.92) followed by Bijapur and Raichur. Retailers share was the major constituent of the total marketing margin.