Preheat the oven. Heat your oven to 400°F (200°C).
Lightly grease a 9x13-inch baking dish.
Mix the seasoning. In a small bowl, combine chili powder, cumin, smoked paprika, garlic powder, onion powder, oregano, salt, pepper, and cayenne if using.
Season the chicken. Toss the chicken strips with half the seasoning, half the lime juice, and 1 tablespoon of olive oil. Let it sit while you prep the vegetables.
Prep the peppers and onions. In a large bowl, toss sliced peppers and onions with the remaining seasoning and 1 tablespoon olive oil. Add lime zest for brightness.
Quick sauté (optional but recommended). For deeper flavor, quickly sear the chicken strips in a hot skillet for 1–2 minutes per side, just to get a hint of color.
Do the same with the peppers and onions for 2–3 minutes. This step boosts flavor and limits extra moisture.
Make the creamy base. In a medium bowl, stir together sour cream, cream cheese, and the drained tomatoes with green chiles until smooth. If you like heat, add a pinch of cayenne here.
Layer the casserole. Spread half the creamy mixture on the bottom of the baking dish.
Add the peppers and onions in an even layer. Top with the chicken strips. Dot the remaining creamy mixture over the top.
Add cheese. Sprinkle 1.5–2 cups of shredded cheese evenly over everything.
If adding beans, corn, or rice, mix them into the pepper layer before adding chicken.
Bake. Cover the dish with foil and bake for 15 minutes. Remove foil and bake another 10–15 minutes, until the cheese is bubbly and the chicken reaches an internal temperature of 165°F (74°C).
Finish and rest. Squeeze the remaining lime juice over the casserole. Let it rest for 5 minutes to set.
Sprinkle with chopped cilantro.
Serve. Scoop into bowls or serve with warm tortillas, tortilla chips, or over rice/cauliflower rice. Add toppings like avocado, salsa, jalapeños, or hot sauce.