The most ancient method of preserving green chile before the advent of refrigeration and freezing is called chile pasado, or chile of the past. Chile pasado was roasted and peeled green chile that was dried in the sun. Since chile is ninety percent water, when that’s removed, the chile is lightweight and very easy to transport. The only problem with it is its appearance—it dries to an unappealing brownish or blackish color, although it rehydrates to a dark green. It is expensive, if you can find it, and this method has been replaced by using modern technology.
Roast the chile pods on a charcoal or gas grill until the pods blister and start to turn black, turning often. Remove them from the grill and place in a plastic bag with a wet paper towel for 1/2 hour. Remove and carefully peel the skin off, leaving the stem and seeds intact. Tie four pods together by wrapping string around the stems and place over a line outside in the sun. Do not let the chiles get wet by rain, and you can protect them from flies and other insects with by wrapping them lightly in cheesecloth. Drying time varies with humidity levels, but dry them until they are very dark and brittle. To store, break off the stems and place the dried pods in a zip bag and then place in a second zip bag. Place in the freezer for optimum results, especially if you live in a humid climate. Because they are brittle, breaking off the stems will sometimes cause the pods to break into strips and other pieces.
To reconstitute the pods, place them in a pot of boiling water for 1 minute. Remove from the heat and let stand for five minutes. Remove from the water and drain. Use them in any recipe calling for green chile in any form except whole pods.
This is an excerpt from Drying, Smoking, Powders, and Spice Blends by Dave DeWitt and Paul Bosland.