Step 1: Season the Chicken

In a small bowl, combine chili powder, smoked paprika, garlic powder, onion powder, ground cumin, cayenne pepper, salt, and black pepper. Sprinkle the seasoning evenly over both sides of the chicken breasts.

Step 2: Sear the Chicken

Heat olive oil in a large skillet over medium heat. Add the chicken breasts and cook for 5–6 minutes per side, or until golden brown and cooked through. The internal temperature should reach 165°F (74°C). Remove from the skillet and set aside to rest.

Step 3: Prepare the Cheese Sauce

In the same skillet, melt butter over medium heat. Whisk in the flour and cook for 1 minute, stirring constantly, to create a roux.

Gradually whisk in the milk and chicken broth, ensuring a smooth consistency. Bring the mixture to a gentle simmer and let it thicken slightly, about 3 minutes.

Reduce the heat to low and stir in the shredded cheddar and Monterey Jack cheese, one handful at a time, until fully melted. Add the diced jalapeño, chili powder, cumin, salt, and pepper. Stir well to combine.

Step 4: Assemble and Serve

Place the seared chicken breasts back into the skillet, spooning the cheese sauce generously over the top. Allow the chicken to warm in the sauce for 2–3 minutes.

Serve immediately, garnished with fresh cilantro, diced tomatoes, sliced jalapeños, and lime wedges, if desired.