While preheating your oven to 400°F, combine all the dry spices in a small bowl: chili powder, paprika, smoked paprika, onion powder, garlic powder, cumin, cayenne pepper, sugar, and salt. Whisk them together so they're evenly distributed—this ensures every piece of chicken and vegetable gets consistent seasoning. Meanwhile, cut your chicken breasts into ½-inch thick strips, slice your onions into ½-inch thick slices, and cut your bell peppers into ½-inch thick strips. I like to cut everything as uniformly as possible so everything cooks at the same rate and gets that nice caramelization.
Spread all your prepared chicken and vegetables on a large sheet pan (roughly 18x13 inches). Drizzle the cooking oil evenly over everything, then sprinkle the spice blend from Step 1 over the top. Using two large spoons or your hands, toss everything together thoroughly until the chicken and vegetables are well coated with oil and seasonings. Spread the mixture back out in a single, even layer—this is key for getting good browning and caramelization rather than steaming.
Place the sheet pan in your preheated 400°F oven and roast for about 18-20 minutes. At the halfway point, give everything a good stir to ensure even cooking and browning. Continue roasting for another 15-20 minutes until the chicken is cooked through (an instant-read thermometer should read 165°F in the thickest piece) and the vegetables are tender with some charred edges. I find that by stirring halfway through, you get better color on all sides without overcooking the chicken.
Remove the sheet pan from the oven and immediately squeeze fresh lime juice over the hot chicken and vegetables—this brightens all the spices and adds a fresh contrast to the richness. Give everything a quick toss to distribute the lime juice evenly. Warm your tortillas if you haven't already, then serve the fajita mixture with sour cream, fresh cilantro, and lime wedges on the side so guests can customize their own fajitas.