Endophytic Trichoderma isolates collected in tropical environments were evaluated for biocontrol activity against Phytophthora capsici in hot pepper (Capsicum annuum). Six isolates were tested for parasitic and antimicrobial activity against P. capsici and for endophytic and induced resistance capabilities in pepper. Isolates DIS 70a, DIS 219b, and DIS 376f were P. capsici parasites, while DIS 70a, DIS 259j, DIS 320c, and DIS 376f metabolites inhibited P. capsici. All six isolates colonized roots but were inefficient stem colonizers. DIS 259j, DIS 320c, and DIS 376f induced defense-related expressed sequence tags (EST) in 32-day-old peppers. DIS 70a, DIS 259j, and DIS 376f delayed disease development. Initial colonization of roots by DIS 259j or DIS 376f induced EST with potential to impact Trichoderma endophytic colonization and disease development, including multiple lipid transferase protein (LTP)-like family members. The timing and intensity of induction varied between isolates. Expression of CaLTP-N, encoding a LTP-like protein in pepper, in N. benthamiana leaves reduced disease development in response to P. nicotianae inoculation, suggesting LTP are functional components of resistance induced by Trichoderma species. Trichoderma isolates were endophytic on pepper roots in which, depending on the isolate, they delayed disease development by P. capsici and induced strong and divergent defense reactions.