Step 1: Preheat your oven to 375°F (190°C). Lightly grease a 9×13 inch baking dish.
Step 2: In a large skillet, heat olive oil over medium-high heat. Add the sliced onion and bell peppers. Sauté for 5-7 minutes, until vegetables are tender-crisp. Stir in 1 tablespoon of fajita seasoning and cook for another minute until fragrant.
Step 3: In a large bowl, combine the softened cream cheese, sour cream, milk, and the remaining 1 tablespoon of fajita seasoning. Whisk until smooth and well combined.
Step 4: Stir the undrained Rotel tomatoes and cooked chicken into the cream cheese mixture until evenly coated.
Step 5: Add the sautéed onion and bell peppers to the chicken and cream cheese mixture. Gently fold everything together until all ingredients are well distributed.
Step 6: Pour the entire mixture into your prepared 9×13 inch baking dish, spreading it out evenly.
Step 7: In a separate small bowl, combine the shredded Monterey Jack cheese and shredded Cheddar cheese. Sprinkle the cheese mixture evenly over the top of the casserole.
Step 8: Bake for 25-30 minutes, or until the casserole is bubbling around the edges and the cheese on top is melted and golden brown. If you desire a crispier, browner top, you can broil for the last 1-2 minutes, watching carefully to prevent burning.
Step 9: Remove from oven and let stand for 5-10 minutes before serving. Garnish with fresh cilantro, if desired. Enjoy your delicious best chicken fajita casserole creamy cheesy!