Colored shading nets have been increasingly studied in semi-arid crop production systems, primarily because of their ability to reduce solar radiation with the attendant reductions in air, plant, and soil temperatures. However, there is a paucity of research concerning the impact of colored shading nets on various crops grown under semi-arid environments, particularly the sweet pepper (Capsicum annum) production system. This study aimed to investigate the effects of three colored shading net treatments (i.e., white, green, and black shading nets with 50% shading intensity and control with unshaded conditions) on the growth and instantaneous water use efficiency (WUE) of sweet pepper. The results showed that all colored shading nets exhibited significantly lower daytime air temperatures and light intensity (22 to 28 °C and 9992 lx, respectively) compared with the control (32 to 37 °C and 24,973 lx, respectively). There were significant differences in sweet pepper growth performance among treatments, including plant height, shoot dry weight, leaf area, leaf chlorophyll content, and vitamin C in ripened fruit. The enhanced photosynthetic rates were observed in sweet pepper plants under the colored shading nets compared with control plants. WUE increased among the colored shading net treatments in the following order: control ≤ white < black < green. Overall, the application of green and black shading nets to sweet pepper production systems under semi-arid environments significantly enhanced plant growth responses and WUE.