Combined occurrence of drought and heat stresses becomes a major constraint in the era of 21^st century. The present study was carried out in chilli K1, TNAU chilli hybrid CO1 and Ramanathapuram Gundu with six treatments of heat and drought to standardize the combined stress levels. The experiment to study the physiological basis of stress tolerance was conducted in open top chambers. The results showed that chilli could tolerate a combined stress up to a stress tolerance index of 0.501 based on the flowering and yield traits and this coincided with 60% pot capacity and ambient temperature + 3°C stress. Variety K1 had better tolerance to the combined stress with minimum yield reduction of 43.90% while, the Hybrid CO1 had poor performance with higher yield reduction of 57.23%. Irrespective of the genotypes, osmotic potential, osmotic adjustment and relative leaf water content (RLWC) were traits strongly associated with drought tolerance. Melaondialdehyde (MDA), plant height and leaf temperature were found to be associated with heat tolerance. The susceptibility of Hybrid CO1 was strongly correlated with severe reduction in RLWC and plant height and significant increase in MDA content under combined stresses