[Objective] The influence of applying Baijiu wastewater sludge to pepper cultivation on soil fertility, crop yield, and heavy metal content is analyzed, providing a theoretical reference for the efficient resource utilization of Baijiu wastewater sludge. [Methods] Based on the characteristics of Baijiu wastewater sludge being rich in nitrogen, phosphorus, and potassium with low heavy metal content, its properties were optimized through granulation. Pepper was selected as the test plant. Granulated Baijiu wastewater sludge was applied to potted pepper soil at rates of 1 500—6 000 kg/hm² based on the local nutrient requirements calculated from pepper yield. Controls included soil with no Baijiu sludge application (CK) and soil with conventional compound fertilizer (F). [Results] ① The treatment of 6 000 kg/hm² (W4) demonstrated the best comprehensive effect. Compared to CK, it increased soil pH and electrical conductivity (EC) by 7.37% and 59.21%, respectively. Soil organic matter (OM), available phosphorus (AP), available potassium (AK), alkaline nitrogen (AN), ammonium nitrogen (NH₄⁺-N), and nitrate nitrogen (NO₃⁻-N) increased by 72.73%, 93.28%, 62.24%, 24.08%, 63.40%, and 14.91%, respectively. ② The heavy metal contents in soil under different treatments were far below the standard limits and met class Ⅰ standards. Furthermore, the contents of iron (Fe) and aluminum (Al) in the treated soil were relatively low, making soil acidification and compaction unlikely. ③ Application of granular Baijiu sludge significantly promoted pepper growth. Specifically, the W4 treatment increased plant height and chlorophyll content by 68.84% and 65.48%, respectively, compared to CK, and the pepper yield was the highest, reaching 33 180 kg/hm2. [Conclusion] Application of granular Baijiu sludge can significantly improve soil physicochemical properties, markedly enhance soil fertility, and effectively promote pepper growth.