1. Prepare the Ingredients

1. Preheat your oven to 375°F (190°C).
2. Slice the chicken into bite-sized pieces and season with half of the fajita seasoning, garlic powder, smoked paprika, ground cumin, salt, and pepper. Toss to coat evenly.
3. Slice the bell peppers and onion into thin strips.

2. Sauté the Vegetables

1. Heat 1 tablespoon of olive oil in a large skillet over medium heat.
2. Add the sliced onions and peppers, seasoning them with the remaining fajita seasoning. Sauté for 5-7 minutes, or until they are slightly softened but still crisp.
3. Transfer the vegetables to a large casserole dish.

3. Cook the Chicken

1. In the same skillet, heat the remaining tablespoon of olive oil.
2. Add the seasoned chicken and cook for 5-7 minutes, stirring occasionally, until the chicken is lightly browned but not fully cooked through. It will finish cooking in the oven.
3. Layer the chicken on top of the vegetables in the casserole dish.

4. Assemble the Casserole

1. Sprinkle the shredded cheddar and Monterey Jack cheeses evenly over the chicken and vegetables.
2. Cover the casserole dish with aluminum foil to prevent the cheese from over-browning.

5. Bake the Casserole

1. Place the casserole in the preheated oven and bake for 20 minutes.
2. Remove the foil and bake for an additional 10-15 minutes, or until the cheese is melted and bubbly and the chicken is cooked through (internal temperature of 165°F/74°C).

6. Garnish and Serve

1. Remove the casserole from the oven and let it cool for 5 minutes.
2. Garnish with chopped cilantro, sliced jalapeños, and a squeeze of fresh lime juice.
3. Serve warm with optional sides like rice, tortillas, or a fresh salad.