Wear gloves to protect your hands when using fresh or dried hot chile peppers. Capsaicin oil, the substance that is the source of “heat” in chiles, can cause severe burns.
If your bare hands and fingers do come in contact with your hot chiles, wash thoroughly with soapy water (a dish washing liquid that cuts oil works well). If burning persists, soak your hands in a bowl of milk. Also, be careful not to touch your eyes or other sensitive areas.
When grinding dried chiles, use a mask as the chile dust in the air can irritate your eyes and throat.
If you eat a chile or food that is too hot, don’t try to extinguish the heat with water! Capsaicin is an oil that will not mix or be diluted with water (or beer!) and will instead distribute the heat to more parts of your tongue and mouth. To cut the heat as quickly as possible, drink some milk (rinsing the mouth while swallowing it), or eat some ice cream or yogurt. Eating starchy foods like rice or bread will also absorb the heat.
Drinking tomato juice or eating a fresh lime or lemon will help as well as the acid will counteract the alkalinity of the capsaicin oil.