Begin by preheating your oven to 375°F (190°C) so it’s fully heated before the dish goes in. While the oven warms up, lightly grease a medium baking dish with a little butter or cooking spray. This prevents sticking and helps the chicken bake evenly.
Place a large skillet over medium heat and add a small amount of oil or butter. Once the pan is warm, add the sliced mushrooms and cook them for about 4–5 minutes, stirring occasionally. The mushrooms will release moisture at first and then begin to brown slightly, which deepens their flavor.
Add the fresh spinach to the skillet with the mushrooms. It may look like a lot at first, but spinach shrinks quickly as it cooks. Stir gently for 1–2 minutes until the spinach wilts and blends into the mushrooms. Remove the skillet from heat and set the mixture aside.
Pat the chicken breasts dry with a paper towel, then season both sides with salt, pepper, and paprika. Place the seasoned chicken pieces evenly in the prepared baking dish so they form a single layer. This helps them cook evenly in the oven.
In a mixing bowl, combine the heavy cream, softened cream cheese, minced garlic, and onion powder. Whisk the mixture together until it becomes smooth and creamy. If the cream cheese is firm, continue stirring until it fully blends into the sauce.
Spoon the sautéed mushroom and spinach mixture evenly over the chicken in the baking dish. Spread it gently so each piece of chicken gets a good amount of vegetables on top.
Slowly pour the prepared cream sauce over the chicken and vegetables, making sure it spreads across the entire dish. Then sprinkle the shredded cheese evenly over the top so it melts into a rich, golden layer while baking.
Place the baking dish in the preheated oven and bake for 25–30 minutes, or until the chicken is fully cooked and the cheese on top is melted and lightly golden. Once finished, remove the dish from the oven and let it rest for about 5 minutes before serving so the sauce thickens slightly and the flavors settle.