Wash and dry the peppers. You can extract the seeds when the peppers are fresh if you plan to use them right away, or wait until they get soft and a little withered.
Slice the pepper in half with the knife and remove the membrane along with the seeds. Collect the seeds on a plate until you have finished with all the peppers.
Spread the seeds on a baking sheet, piece of aluminum foil or a large plate and allow to dry. Place the baking sheet in an area where it can sit undisturbed. The average drying time is from one to three days. Test the seeds for dryness by attempting to break one in half. If the seed is brittle and breaks, they are dry enough.
Empty the seeds into a plastic or glass container with a lid and store out of direct sunlight, preferably somewhere it is cool. Make sure lids are on tight to avoid spilling and to prevent moisture from getting inside the container.