Abstract: Wood vinegar is an organic mixture which comes from condensation and separation of by-products of wood procession. Wood vinegar is acidic in property and contains over 500 kinds of organic compounds, benefiting the growth of plant and increasing the resistance to diseases. A series of pot cultivation experiments were carried out to study the effects of wood vinegar on Lou soil properties (pH, EC, organic matter content, and structure) and pepper growth. The results show that soil pH is decreased and soil EC is increased with the increase of adding amount of wood vinegar to soil. Applying wood vinegar with dilution of less than 5 times could increase soil organic C content, contribute to the formation of aggregates of 2 mm and 0.25-2 mm size classes. However, applying wood vinegar with dilution of less than 5 times harms the growth of pepper and even lead the death of pepper plants. Applying wood vinegar with dilution of more than 50 times promotes the growth and increases the yield of pepper. Therefore, irrigating wood vinegar with dilution of 3-5 times is recommended during fallow periods, dilution of 50-250 times during crop growth season.