Micropropagated chile ancho pepper (Capsicum annuum L. cv. San Luis) plants were transferred to ex vitro conditions to study plantlet performance and selected physiological changes that occur during acclimatization and post-acclimatization. The physiology of the plantlets was characterized by measuring leaf gas exchange and water status. Plant growth was determined by assessing plant height, leaf number, total leaf area, relative growth rate (RGR), and leaf, root, and stem dry mass. Measurements were taken at 0, 1, 2, 3, 6, 12, and 24 days after transplanting. After initial transplanting ex vitro to liner pots with soilless media, plantlet wilting was observed that correlated with reduced leaf relative water content (RWC). Water stress was partially alleviated by a reduction in stomatal conductance (gs), confirming that the in vitro formed stomata were functional and able to regulate transpiration (E) to minimize desiccation losses. Because of this stomatal control, plantlets had minimal transplant shock, recovered, and survived. Prior to transplanting, micropropagated plantlets showed heterotrophic/mixotrophic characteristics as indicated by low photosynthesis [(A) 4.74 μmol·m2·s-1]. During acclimatization, RWC, gs, E, and A were significantly lower 2 days after transplanting. However, within 6 days after transplanting, plantlets recovered and became autotrophic, attaining high A (16.3 μmol·m-2·s-1), gs, and E. The stabilization and improvement of plantlet water status and gas exchange during acclimatization and post-acclimatization closely correlated with dramatic increases in plantlet growth.