‘Zunla No. 1’ was employed as the test material. Toxicological experiments were conducted to evaluate the effects of Cd on seedling growth and zinc oxide nanoparticles(ZnO NPs) on seed germination rate under Cd stress, while soil pot trials were carried out to examine the impacts of varying ZnO NPs application rates(0, 20, 50, 100 mg/kg) on soil Cd passivation and Cd accumulation in pepper plants. The results showed that, compared with the treatment without ZnO-NPs application, under 10 mg/L Cd stress, the application of ZnO-NPs on day 7 increased the seed germination rate of ‘Zunla No. 1’ by 46.67, 46.67, and 33.34 percentage points for the 20, 50, and 100 mg/L ZnO-NPs treatments, respectively. Under 10 mg/kg Cd stress, the application of 50 mg/kg ZnO-NPs significantly increased the mass fractions of chlorophyll a and chlorophyll b in the leaves of ‘Zunla No. 1’ by 33.61% and 227.27%, respectively; the net photosynthetic rate significantly increased by 41.13%; the stomatal conductance significantly increased by 59.76 mmol/(m2?s); the transpiration rate significantly increased by 2.28 times; the intercellular CO2 concentration significantly decreased by 214.30 μmol/mol; the activities of superoxide dismutase and peroxidase increased significantly by 170.28 U/g and 853.60 U/g, respectively, indicating enhanced plant stress resistance. The Cd mass fractions in the roots, leaves, stems, and fruits of ‘Zunla No. 1’ decreased sequentially. The application of 50 mg/kg ZnO-NPs exhibited the best inhibitory effect on Cd accumulation in fruits, significantly reducing Cd mass fractions in fruits, stems, and leaves by 44.50%, 47.35%, and 38.99%, respectively, compared with the treatment without ZnO-NPs application. The application of 20 mg/kg ZnO-NPs achieved the best soil Cd immobilization effect, with an immobilization rate of 18.02% and a reduction of 0.51 mg/kg in available Cd mass fraction. In summary, under 10 mg/kg Cd stress, application of ZnO NPs at 50 mg/kg enhanced the stress tolerance of ‘Zunla No. 1’, reduced Cd accumulation and toxicity, and decreased soil Cd bioavailability.