Capsaicinoids from pungent red chilies (Capsicum annum and Capsicum frutescens) have received significant attention as a natural supplement for the management of obesity. However, the consumption of chili extract at physiologically relevant dosage of capsaicinoids is a challenge owing to its pungency and gastrointestinal discomforts. The present study reports the systemic absorption, safety and influence of a novel, food-grade, and sustained-release formulation of capsaicinoids-rich red chili extract using fenugreek dietary fiber (Capsifen®). Twenty-four healthy overweight subjects were randomized into placebo (n = 12) and Capsifen (n = 12) groups and supplemented with 200 mg × 1/day of Capsifen (4 mg capsaicinoids/day) for 28 days. Influence of Capsifen on eating behavior and appetite was followed by Three-Factor Eating Questionnaire (TFEQ) and Council of Nutrition Appetite Questionnaire (CNAQ), respectively. Consumption of Capsifen did not reveal any adverse events or deviations in hematology and biochemical parameters related to safety. However, a significant decrease in body weight (2.1%), w/h ratio (4%) and body mass index (BMI) (2.2%) were observed among Capsifen group when compared to placebo. The TFEQ and appetite analysis revealed a significant improvement in uncontrolled eating and reduction in appetite among Capsifen subjects. The UPLC-ESI-MS/MS analysis confirmed the absorption of capsaicinoids from CAP supplementation. The study further demonstrated the safety and tolerability of Capsifen at the investigational dosage. Thus, the significant reduction in anthropometric parameters such as body weight, w/h ratio, and BMI along with the improvement in eating behaviour as well as appetite, indicated the potential body weight management effect of Capsifen.