Hot pepper (HP), Capsicum annuum (L.), is a solanum plant domesticated in Mesoamerica. It is currently widespread worldwide, and its uses are varied, such as an excellent flavoring, pigment base, and as a food resource with source of vitamins. The seven top world producers of HP are China, Mexico, Turkey, Spain, United States, Nigeria, and Indonesia. Mexico is producing about 623,238 t/year of fresh fruits in 136,398 ha; Colima produced 17,181 t in 676 ha, with a mean of 27 t·ha-1. The culture of HP in Colima is facing certain limitations in showing its productive potential, such as maintaining fertile and well-drained soils, and constant soil moisture; being weed-free during the first weeks after transplanting; and sustaining plant uniformity into transplantation. Transplantation is made in seed beds, but there is a lack of scientific evidence on shade requirements in the seed nursery to accelerate and improve plant quality for transplanting, and to impact on fruit yield. The aim was to evaluate the effect of levels of shading on the germination and vegetative development of `Serrano' HP under greenhouse conditions. Four levels of shading were evaluated using mesh fabrics to produce 90%, 75%, and 50% shade, and a control without shading on the seed beds. A completely randomized design with four treatments and four replications was used. The shading treatments reduced the germination period in about 1 day, increased the percentage of germination with a range between 1.75% and 3.25%; increased the plant height 0.83, 2.85, and 4.38 cm at 3, 6, and 10 days post-emergence; increased the root biomass about 0.01 g/plant, and 0.24 g of fresh foliage with the 90% shade compared with the control. Overall, a better agronomic performance of `Serrano' HP was obtained with 90% shading.