The plant itself can be found in two locations: The Jade Rainforest and the Highland Rainforest. It only spawns in specific areas of those two locations and can be difficult to find.
Chili takes one in-game day (24 minutes) to respawn, and each Chili location has its own number of Chili plants that may appear each time the plant respawns. Be aware: Chili only respawns if there are no players nearby. If there are players nearby when the Chili is set to respawn, the Chili will only respawn once all nearby players have moved away or logged out. While the range of 'nearby' may be different, the much more common Dirt has the same restriction on respawning.
When collected, Chili plants have a chance to yield Hot Chili and/or Chili Seed.
Hot Chili is a food item that restores 10 hunger but takes away 5 hydration.
Chili Seeds can planted in a Farm plot, allowing players their own supply of Chili and, potentially, Chili Seeds. In March of 2019, players could briefly buy Chili Seed using Exchange Coins bought from the Shop.