Remove the thin outer skin of green chiles by blistering or roasting them on an outdoor grill. Place on a hot grill and turn chiles frequently, so all sides get blistered. Then, for crisp chiles, plunge them into an ice water bath. Before peeling chiles, put on thin rubber gloves or coat hands with butter. Keep hands away from eyes.
Capsaicin burns hands and eyes just as it creates a hot sensation when eaten.
To peel blistered pods, start at the stem end, peel skin down. Remove seeds and stems if desired. Peeled chiles can then be used fresh or they can be frozen, canned or dried. Photograph courtesy of Judy Sedbrook.