Start by preheating your oven to 375°F (190°C) and lightly grease an 8x8 or 9x9-inch baking dish to ensure nothing sticks.
In a large skillet over medium heat, warm the olive oil. Add the ground beef and cook until beautifully browned, breaking it into small pieces with your spatula.
Toss in the finely chopped onion and minced garlic with the beef. Sauté for just 2–3 minutes until the onion is soft and the garlic smells amazing.
Stir in the taco seasoning, salt, and black pepper, mixing thoroughly so the beef is perfectly coated with all those delicious spices.
Lower the heat to low. Add the drained diced tomatoes with green chilies, softened cream cheese cubes, and sour cream to the skillet. Stir continuously until the cream cheese completely melts, creating a wonderfully creamy and combined mixture.
Spoon this savory beef and cheese mixture evenly into your prepared baking dish, spreading it out smoothly.
Generously sprinkle both shredded cheddar and Monterey Jack cheeses over the top of the beef mixture.
Place the uncovered baking dish in your preheated oven and bake for 20–25 minutes, or until the cheese on top is melted, bubbly, and slightly golden brown.
Carefully remove the casserole from the oven and let it cool for a few minutes before serving. Garnish with fresh chopped green onions or cilantro if you like, for an extra burst of freshness and color.