Preheat the oven to 375°F and lightly grease a 9x13 baking dish.
Dice the jalapeños, removing the seeds and membranes for milder heat if desired. Set aside.
In a medium bowl, beat the softened cream cheese until smooth. Add the sour cream and mix until fully combined. Fold in the diced jalapeños and shredded cheddar cheese until evenly distributed.
Place the chicken breasts in the prepared baking dish and season evenly with garlic powder and onion powder.
Spread the cream cheese mixture evenly over the chicken breasts, covering the tops completely. Sprinkle the chopped bacon over the cheese layer.
Bake uncovered for 35–40 minutes, or until the chicken is cooked through and reaches an internal temperature of 165°F.
Remove from the oven and let rest for a few minutes before serving so the topping can set slightly.
Soften the cream cheese fully: Softened cream cheese blends smoothly and spreads easily over the chicken. Cold cream cheese can stay lumpy and won’t bake evenly.
Control the heat: Removing the seeds and membranes from the jalapeños keeps the flavor mild. For more spice, leave some seeds in or add an extra jalapeño.
Avoid overcrowding the pan: Arrange the chicken in a single layer so it bakes evenly and doesn’t steam.
Check doneness with a thermometer: Chicken is fully cooked at 165°F. Avoid over baking to keep it juicy.
Let it rest before serving: Resting for a few minutes allows the topping to set and keeps the chicken from releasing excess moisture.