Preheat Oven: Set your oven to 350°F (175°C). Place the chicken thighs in a casserole dish, cover with foil, and bake for 30-35 minutes, or until the chicken reaches an internal temperature of 160°F. After baking, allow the chicken to cool slightly before shredding or chopping it into bite-sized pieces. Be sure to drain any cooking liquid from the dish.
Cook Vegetables: While the chicken is baking, heat a frying pan coated with cooking spray over medium-low heat. Add the sliced red pepper and onion. Cook, stirring occasionally, until the vegetables are soft and golden. You can let them caramelize while the chicken is baking by adjusting the heat between low and medium, stirring every 5-10 minutes.
Mix Casserole Ingredients: In a large bowl, combine the softened cream cheese, half of the shredded cheddar cheese, and the fajita seasoning. Add the shredded chicken and cooked onions and peppers, stirring everything together. Transfer this mixture back into the same casserole dish you used for baking the chicken.
Top with Cheese: Sprinkle the remaining shredded cheddar cheese evenly over the top.
Bake: Return the casserole to the oven and bake for 25-30 minutes, or until it’s hot and bubbly with a golden, melted cheese topping.