Preheat the oven to 375°F (190°C).
Prepare the chicken: Season the chicken breasts on both sides with fajita seasoning, salt, and pepper.
Cook the vegetables: Heat olive oil in a large skillet over medium heat. Add the sliced bell peppers and onions. Cook for 5-7 minutes until they soften and start to caramelize. Set aside.
Assemble the dish: Place the seasoned chicken breasts in a greased baking dish. Top with the cooked peppers and onions, then sprinkle shredded cheddar and mozzarella cheese evenly over the chicken and vegetables.
Bake: Place the dish in the preheated oven and bake for 25-30 minutes, or until the chicken is cooked through and the cheese is bubbly and golden.
Garnish: Once done, remove from the oven and let rest for 5 minutes. Sprinkle fresh cilantro on top and serve with lime wedges for a tangy touch.
