Preheat and prep. Heat the oven to 375°F (190°C). Grease a 9x13-inch baking dish with a little oil or butter.
Brown the beef. Warm a large skillet over medium-high heat.
Add the ground beef and cook, breaking it up, until mostly browned and no longer pink. Drain excess grease if needed, leaving about a tablespoon for flavor.
Sauté the veggies. Add the oil if the pan looks dry. Stir in the onion and bell pepper.
Cook 4–5 minutes until softened. Add the minced garlic and cook 30 seconds until fragrant.
Season generously. Sprinkle in chili powder, cumin, smoked paprika, oregano, onion powder, garlic powder, cayenne (if using), salt, and black pepper. Stir well to coat the meat and veggies.
Add tomatoes. Mix in the drained diced tomatoes with green chiles.
Simmer 2–3 minutes to let flavors come together and reduce any extra moisture.
Make the creamy binder. In a bowl, whisk the softened cream cheese and sour cream until smooth. If it’s too thick, microwave the cream cheese for 10–15 seconds first.
Combine. Remove the skillet from heat. Stir the cream cheese mixture into the beef until evenly combined and creamy.
Taste and adjust salt or heat as needed.
Layer and top. Transfer the mixture to the prepared baking dish. Spread evenly. Top with 1.5 cups of shredded cheese, reserving 1/2 cup for later.
Bake. Bake uncovered for 15 minutes.
Sprinkle the remaining 1/2 cup cheese on top and bake another 5–7 minutes, until melted and bubbly with lightly golden spots.
Rest and garnish. Let the casserole rest 5–10 minutes to set. Finish with your favorite keto-friendly toppings like avocado, cilantro, and pickled jalapeños.