NMSU Guide E-324 calls peeling the most important step in processing green chile, because the skin is hard to chew and digest and affects the texture and look of a dish. Peeling requires blistering first: roasting the pods over high heat until the skin puffs and can be pulled away from the flesh. The guide gives an oven or broiler at 400 to 450°F with the chiles in a single layer, a stovetop burner covered with heavy wire mesh, or a charcoal or gas grill, and recommends six to eight minutes, turning often, after slitting each pod so that steam can escape. A microwave method also loosens the skin, though no blistering is visible and the skin turns tougher and more brittle.
After roasting, the chiles are cooled before peeling. The guide offers three choices: spread them in a single layer, plunge them into ice water for a crisper result, or cover them with a damp towel or seal them in a covered heat-safe container to steam for more thoroughly cooked chile. It warns against garbage bags, since chemicals can leach from heated plastic. Once cool, the skin should come away with a gentle tug and an occasional rinse, and unblistered patches can be scraped with a knife or peeler.
Chile burns skin and eyes, and the guide recommends rubber gloves or a thin layer of solid fat on the hands, and vinegar to ease the sting. Roasted, peeled chiles should be refrigerated within two hours and used or frozen within three days, and packaged chile should be cooled below 40°F before it goes into the freezer.