Preheat the air fryer to 370–380°F (188–193°C) for 3–5 minutes.
A hot basket helps the brats brown well and the peppers start to caramelize faster.
Prep the vegetables. In a bowl, toss pepper strips and onion with the olive oil, Italian seasoning, garlic powder, smoked paprika, and a pinch of salt and pepper. Coat evenly.
Load the basket. Lightly spray the basket if sticking is a concern. Spread the peppers and onion in an even layer.
Nestle the bratwursts on top so they’re not fully buried. Air flow helps them brown.
Air fry for 8 minutes. Halfway through, shake the basket or use tongs to toss the peppers slightly. This prevents uneven cooking and helps everything brown.
Flip and continue. Turn the brats and cook another 6–8 minutes, until the brats are browned and reach an internal temperature of 160°F (71°C) for pork or beef, or 165°F (74°C) for chicken.
Peppers should be tender with a little char at the edges.
Toast the buns (optional). Remove the brats and peppers. Place buns in the air fryer for 1–2 minutes at 350°F (177°C) until warm and lightly crisp.
Serve. Pile peppers and onions into each bun, top with a brat, and add mustard or sauerkraut. For a bun-free option, slice the brats and serve over the peppers, or plate with rice, quinoa, or roasted potatoes.