In a small bowl, combine chili powder, oregano, cumin, garlic powder, hot sauce, salt, and black pepper to create a fragrant spice paste. Pat the chicken strips dry with paper towels, then coat them thoroughly with the spice mixture, making sure each piece is well covered. Let the seasoned chicken sit at room temperature for 15-30 minutes—this allows the flavors to penetrate the meat and helps it cook more evenly. While the chicken marinates, you can prep your vegetables.
Slice both bell peppers and the onion into thin, uniform strips—this ensures even cooking and creates the signature fajita texture. Keep the vegetables separate from the chicken so you can layer flavors as you cook. Having everything prepped and ready (mise en place) before you start cooking will make the process smooth and prevent the chicken from overcooking while you're chopping.
Heat 1 tablespoon of olive oil in a large skillet over medium-high heat until shimmering. Add the sliced peppers and onions, then sprinkle with chili powder, smoked paprika, salt, and black pepper. Cook for 4-5 minutes, stirring occasionally, until the vegetables are tender-crisp and slightly charred at the edges. This step builds a deep, smoky flavor foundation and gives the peppers time to release their natural sweetness. Remove the vegetables to a clean plate and set aside.
Add the remaining 1 tablespoon of olive oil to the same skillet and increase the heat to medium-high. Once the oil is hot, carefully add the marinated chicken in a single layer and resist the urge to move it for the first 2-3 minutes—this creates a flavorful golden crust through the Maillard reaction. After 2-3 minutes, stir the chicken and continue cooking for another 3-4 minutes, breaking up any clumps, until the chicken is cooked through and no longer pink in the center. I like to let that initial sear develop undisturbed because it creates such a rich, caramelized flavor that you can't get by stirring constantly.
Return the sautéed peppers and onions from Step 3 to the skillet with the cooked chicken and toss everything together gently over the heat for about 1 minute to marry the flavors. Remove the skillet from heat and immediately squeeze the lime halves over the fajitas, then sprinkle the fresh cilantro on top for brightness and freshness. The lime juice adds acidity that cuts through the richness and makes all the spices pop.