Add all ingredients, except the onion, to a saucepan and bring to a simmer. Simmer for 5 minutes.
Use a slotted spoon to remove the peppers and mix with the sliced onion. Layer the red onion and peppers in mason jars. (This is typically enough to make about 1.5 pints of pickled onions.)
Add the pickling liquid to the jars, completely covering the onions. If needed, add a little extra vinegar to cover the onions.
Seal and refrigerate, at least overnight, prior to using.