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Pepper (Capsicum L.) is a nutritionally and economically important crop that is cultivated throughout the world as a vegetable, condiment, and food additive. Genetic transformation using Agrobacterium tumefaciens (agrobacterium) is a powerful biotechnology tool that could be used in pepper to develop community-based functional genomics resources and to introduce important agronomic traits. However, pepper is considered to be highly recalcitrant for agrobacterium-mediated transformation, and current transformation protocols are either inefficient, cumbersome or highly genotype dependent. The main bottleneck in pepper transformation is the inability to generate cells that are competent for both regeneration and transformation. Here, we report that ectopic expression of the Brassica napus BABY BOOM AP2/ERF transcription factor overcomes this bottleneck and can be used to efficiently regenerate transgenic plants from otherwise recalcitrant sweet pepper (C. annuum) varieties. Transient activation of BABY BOOM in the progeny plants induced prolific cell regeneration and was used to produce a large number of somatic embryos that could be converted readily to seedlings. The data highlight the utility of combining biotechnology and classical plant tissue culture approaches to develop an efficient transformation and regeneration system for a highly recalcitrant vegetable crop. Electronic supplementary material The online version of this article (doi:10.1007/s00299-011-1018-x) contains supplementary material, which is available to authorized users.