Long terminal repeat retrotransposons (LTR-Rs) are major elements creating new genome structure for expansion of plant genomes. However, in addition to the genome expansion, the role of LTR-Rs has been unexplored. In this study, we constructed new reference genome sequences of two pepper species (Capsicum baccatum and C. chinense), and updated the reference genome of C. annuum. We focused on the study for speciation of Capsicum spp. and its driving forces. We found that chromosomal translocation, unequal amplification of LTR-Rs, and recent gene duplications in the pepper genomes as major evolutionary forces for diversification of Capsicum spp. Specifically, our analyses revealed that the nucleotide-binding and leucine-rich-repeat proteins (NLRs) were massively created by LTR-R-driven retroduplication. These retoduplicated NLRs were abundant in higher plants, and most of them were lineage-specific. The retroduplication was a main process for creation of functional disease-resistance genes in Solanaceae plants. In addition, 4-10% of whole genes including highly amplified families such as MADS-box and cytochrome P450 emerged by the retroduplication in the plants. Our study provides new insight into creation of disease-resistance genes and high-copy number gene families by retroduplication in plants.