Chilli (Capsicum annum L.) plant is a high economic value vegetable in Malaysia, cultivated in soilless culture containers. In soilless culture, the adoption of small container sizes to optimize the volume of the growing substrate could potentially reduce the production cost, but will lead to a reduction of plant growth and yield. By understanding the physiological mechanism of the growth reduction, several potential measures could be adopted to improve yield under restricted root conditions. The mechanism of growth reduction of plants subjected to root restriction remains unclear. This study was conducted to determine the physiological mechanism of growth reduction of root-restricted chilli plants grown in polyvinyl-chloride (PVC) column of two different volumes, 2392 cm3(root-restricted) and 9570 cm3(control) in soilless culture. Root restriction affected plant growth, physiological process, and yield of chilli plants. Root restriction reduced the photosynthesis rate and photochemical activity of PSII, and increased relative chlorophyll content. Limited root growth in root restriction caused an accumulation of high levels of sucrose in the stem and suggested a transition of the stem as a major sink organ for photoassimilate. Growth reduction in root restriction was not related to limited carbohydrate production, but due to the low sink demand from the roots. Reduction of the total yield per plant about, 23% in root restriction was concomitant, with a slightly increased harvest index which reflected an increased photoassimilate partitioning to the fruit production and suggested more efficient fruits production in the given small plant size of root restriction.