Thermal and hyperspectral data can be used to determine non-destructive water stress in agriculture. The objective of this study was to determine water stress not visible to the naked eye, the required threshold to start irrigation, and also to estimate the yield and some physiological traits of pepper (Capsicum annuum L.) using thermal imaging and hyperspectral data at different water stress levels. A field experiment was conducted in Canakkale, Turkey in 2013 consisting of four irrigation treatments: full irrigation (100% (non water-stressed)) and three stress levels applying 25, 50, and 75% of full irrigation. The results indicated that pepper yield, chlorophyll content (ChlR), relative water content, and thermal indices and spectral indices were affected adversely by water stress. While none of the spectral indices were able to distinguish statistically the difference between non water-stressed (I-100) and mildly water-stressed (I-75) pepper, all the thermal indices provided acceptable results. According to single variable regression and stepwise multiple linear regression analysis, significant relationships were determined between the investigated traits and indices. It was found that pepper is very susceptible to water stress and also that thermal and spectral indices can be used successfully in the determination of water stress.