On 20 May 2007, Bayern Munich announced Pizarro would be leaving the club. He finished the 2006–07 season with 12 goals in 45 appearances.
On 1 July 2007, Chelsea officially signed Pizarro and confirmed that he had completed his medical and agreed on personal terms to join the club on a Bosman transfer, signing a four-year deal. He was the first Peruvian to sign for Chelsea. Pizarro also revealed that his decision was influenced by the advice of his national team teammate Nolberto Solano, who played in England with Newcastle, Aston Villa and West Ham United, as well as Owen Hargreaves, who at the time also played for Bayern Munich.
Pizarro was assigned the number 14, the same number he wears for Peru, and his former shirt number at Bayern Munich. He succeeded Geremi as the holder of the shirt number 14 at Chelsea. He made his debut against Manchester United in the 2007 FA Community Shield. He came on as a substitute, but then missed one of the penalties in the shootout as Chelsea lost. His Chelsea league career got off to a good start, scoring a goal on his debut on the opening weekend of the 2007–08 Premier League season against Birmingham City. However, after José Mourinho's departure, and the signing of French striker Nicolas Anelka, Pizarro found himself surplus to requirements by the then new manager Avram Grant. Pizarro did play an important role in Chelsea progressing to the fourth round of the 2008 FA Cup, by contributing to the goal which rebounded off QPR keeper Lee Camp and into the net. He then went on to score the only goal in a match against Birmingham. This meant that his only two Premier League goals in a Chelsea shirt both came in separate games against Birmingham City.
On 7 December 2007, an investigation on having introduced women and alcohol into the national squad's hotel two days before Peru's away drubbing at the hands of Ecuador (5–1) started running, and Pizarro had thus been suspended 18 months from the national team starting on the day before the match. Other Peruvian players based overseas like Jefferson Farfán and others were also suspended. Since Pizarro claimed to be innocent, he started a trial against the Peruvian Football Federation. This action alerted FIFA about the case, who warned the player not to take it to the regular judges or he could face an international ban. On 3 July 2008, after an investigation and a review of the facts, the suspension was changed to three months (from the date of appeal in April 2008) and a $10,000 fine. Pizarro served the three-month ban.