Capsicum chlorosis virus (CaCV) (genus Tospovirus, family Bunyaviridae) is a serious pathogen of capsicum and tomato crops in Australia and South-east Asia. CaCV is transmitted by thrips (order Thysanoptera) in a circulative and propagative mode. Due to lack of natural resistance in commercial cultivars and emergence of thrips populations with insecticide resistance, CaCV poses a serious threat to horticultural industries. Present understanding of the molecular basis of plant - CaCV - thrips interactions is rudimentary. In this study we sequenced transcriptomes of capsicum (Capsicum annuum) and Thrips palmi in response to CaCV infection using Illumina HiSeq. We comparatively analysed transcriptomes of capsicum during compatible and incompatible interactions with CaCV when strong hypersensitive reaction was induced in a CaCV-resistant C. annuum x C. chinense breeding line 4 days after inoculation. In the incompatible interaction, 2484 genes were differentially expressed and this resistance was underpinned by strong up-regulation of defence-related genes and down-regulation of energy consuming cellular processes such as photosynthesis. We also identified 54 capsicum genes that responded to CaCV infection at an early stage of the compatible interaction. These genes appeared to be involved in disease development and repression of defence-related genes and defence signalling. To determine molecular interactions between CaCV and thrips vector, we de novo assembled whole-body transcriptome of adult T. palmi. Comparative transcriptome analyses showed that genes involve in innate immune response, salivary glands and insecticide resistance were up-regulated in viruliferous thrips. The most influenced immunity pathways were lysosome and melanisation. Our analyses also showed that CaCV may have direct effect on the fecundity of T. palmi due to enhanced expression of 54 vitellogenin genes. Identification of genes involved in plant-virus-vector interaction has provided potential targets for future disease control efforts.