Preheat your oven to 400°F (200°C).
In a large mixing bowl, combine the olive oil, chili powder, cumin, smoked paprika, garlic powder, salt, and black pepper. Mix well to create a marinade.
Cut the chicken breasts into thin strips. Add the chicken, sliced bell peppers, and sliced red onion to the bowl, tossing everything together to ensure the chicken and vegetables are well coated in the marinade.
Spread the chicken and vegetable mixture evenly on a sheet pan in a single layer.
Bake in the preheated oven for 25 minutes, or until the chicken is cooked through (internal temperature reaches 165°F or 75°C) and the vegetables are tender.
While the chicken and vegetables are baking, warm the tortillas in a dry skillet over medium heat for about 1 minute on each side, or place them in a microwave for 30 seconds.
Once cooked, remove the sheet pan from the oven. Let it cool for a few minutes before serving.
Serve the fajitas warm with tortillas, fresh lime wedges, and garnish with cilantro if desired.