Chorizo can be a fresh sausage, in which case it must be cooked before eating. In Europe it is more frequently a fermented cured smoked sausage, in which case it is usually sliced and eaten without cooking. Spanish chorizo and Portuguese chouriço get their distinctive smokiness and deep red color from dried smoked red peppers (pimentón/pimentão or colorau). Due to culinary tradition, and the expense of imported Spanish smoked paprika, Mexican chorizo (and chorizo throughout Latin America) is usually made with chile peppers, which are used abundantly in Mexican cuisine. In Latin America, vinegar also tends to be used instead of the white wine usually used in Spain. In Spain and Portugal the sausages are usually encased in intestines, in a traditional method that has been used since Roman times. In Latin America, however, they are usually encased in artificial casings, have a smooth commercial appearance, and artificial colorings are often used.

Chorizo can be eaten as is (sliced or in a sandwich), barbecued, fried, or simmered in apple cider or other strong alcoholic beverage such as aguardiente. It also can be used as a partial replacement for ground beef or pork.

Spanish style tapas bars that serve traditional style chorizo have gained in popularity in recent years and now appear in many large cities throughout North America.

Spanish chorizo is made from coarsely chopped pork and pork fat, seasoned with smoked pimentón (paprika) and salt. It is generally classed as either picante (spicy) or dulce (sweet), depending upon the type of smoked paprika used. There are hundreds of regional varieties of Spanish chorizo, both smoked and unsmoked, which may contain garlic, herbs and other ingredients. For example, Pamplona-style chorizo is a thicker sausage with the meat more finely ground. Chorizo comes in short, long, hard and soft varieties, some of which are suited to being eaten as an appetizer or tapas, whereas others are better suited to cooking. Leaner varieties are typically better suited to tapas, eaten at room temperature, whereas fattier versions are generally used for cooking. A general rule of thumb is that long, thin chorizos are sweeter and short chorizos are spicy, although this is not always the case.

As well as chorizo, Spain also produces many other varieties of pork elaborations, such as lomo embuchado or salchichón, cured and air dried in a similar way. Lomo is a lean cured meat to slice, made from the loin of the pig, which is marinated and then air-dried. Salchichón is another cured sausage without the pimentón seasoning of chorizo, but flavoured with black peppercorns instead.

Depending on the variety, chorizo can been eaten directly, sliced in a sandwich, barbecued, fried and is also an ingredient to several dishes where it accompanies beans, such as fabada or cocido madrileño. The version of these dishes con todos los sacramentos ("with all the sacraments") adds to chorizo other preserved meats like tocino (cured bacon) and morcilla (Spanish blood sausage).

Portuguese chouriço is made with pork, fat, wine, paprika and salt. It is then stuffed into natural or artificial casings and slowly dried over smoke. There are many different varieties, changing in color, shape, seasoning and taste. Many dishes of Portuguese cuisine and Brazilian cuisine make use of chouriço - Cozido à portuguesa and Feijoada are just two of them.[citation needed]

A popular way to prepare chouriço is partially sliced and flame cooked over alcohol at the table. Special glazed earthenware dishes with a lattice top are used for this purpose.

In Portugal there is also a blood chouriço (chouriço de sangue) very similar to the Black Pudding, amongst many other types of Enchidos, such as Alheira, Linguiça, Morcela, Farinheira, Chouriço de Vinho, Chouriço de ossos, Cacholeira, Paia, Paio, Paiola, Paiote, Salpicão and Tripa enfarinhada.

Cooked Portuguese chouriço