Prep the oven and dish: Preheat your oven to 375°F (190°C). Grease a 9x13-inch baking dish with a little oil or butter.
Sauté the veggies: Heat the avocado oil in a large skillet over medium heat.
Add the onion, bell pepper, and zucchini. Cook for 5–7 minutes until softened and lightly browned. Stir in the garlic and cook 30 seconds more.
Season it up: Add chili powder, cumin, smoked paprika, oregano, salt, and pepper.
Stir to coat the vegetables and toast the spices for about 30 seconds. Remove from heat.
Make the creamy taco sauce: In a large bowl, whisk together the salsa, sour cream, and cream cheese until smooth. If the cream cheese is stiff, microwave it for 10–15 seconds first.
Combine the filling: Fold the shredded chicken, sautéed veggies, green chiles, cilantro, and 1 cup of the shredded cheese into the sauce.
Taste and adjust salt if needed.
Assemble the casserole: Spread the mixture evenly in the prepared baking dish. Sprinkle the remaining 1/2 cup cheese over the top. Add jalapeño slices if you like it spicy.
Bake: Bake uncovered for 18–22 minutes, until the edges bubble and the cheese is melted and lightly golden.
Rest and serve: Let it rest 5–10 minutes so it sets slightly.
Garnish with more cilantro and serve with lime wedges. Enjoy as is, or with lettuce cups or cauliflower rice.