Preheat your oven to 375°F (190°C). Lightly grease a 9×13-inch baking dish with olive oil or cooking spray so the chicken doesn’t stick.
Pat the chicken breasts dry with paper towels and place them in a single layer in the prepared baking dish. If any pieces are very thick, you can pound them to an even thickness so they cook more evenly.
In a medium mixing bowl, add the sour cream, shredded cheddar cheese, chopped green chiles, taco seasoning, lime juice, salt (if using), and black pepper.
Stir the mixture until everything is well combined and evenly coated in the seasoning. It should be thick, creamy, and spoonable.
Using a spatula or spoon, pour this creamy mixture over the chicken breasts in the baking dish, spreading it out so each piece is completely covered. It’s fine if some of the chicken peeks through on the sides; the sauce will melt and spread as it bakes.
Place the baking dish on the middle rack of the preheated oven and bake for 25 to 35 minutes, or until the chicken reaches an internal temperature of 165°F (74°C) in the thickest part. Thinner chicken breasts will cook faster; thicker ones may need the full time.
Once done, remove the baking dish from the oven and let the chicken rest for about 5 minutes so the juices settle and the sauce thickens slightly.
Sprinkle the top with chopped fresh cilantro if you like, and serve the chicken with extra lime wedges on the side for squeezing over each portion.
Variations & Tips
For a little heat, use hot green chiles instead of mild, or add a pinch of cayenne or crushed red pepper flakes into the creamy mixture. If you prefer a slightly lighter dish, swap half of the sour cream for plain Greek yogurt; just know it will be a bit tangier. You can also use a Mexican cheese blend or pepper jack instead of cheddar for extra flavor.
If your chicken breasts are very large, slice them in half horizontally to create thinner cutlets so they cook more quickly and evenly. To make this more like a one-pan meal, scatter drained canned black beans and a handful of frozen corn around the chicken before pouring the creamy mixture over the top, then bake as directed.
Leftovers reheat well: slice the chicken and tuck it into tortillas for next-day tacos or layer it over greens for a quick taco salad with the extra sauce as a warm dressing.
