Preheat the oven to 400°F (200°C) and lightly spray a muffin tin with cooking spray.
Place the shredded chicken, taco seasoning, and water in a skillet and cook over medium-high heat, stirring occasionally, until the sauce thickens and the water has evaporated.
Remove the skillet from heat and stir in about 1 tablespoon lime juice, adjusting to taste.
While the chicken cooks, separate the biscuits and press each one into the bottom and up the sides of the prepared muffin cups to form a cup.
Spoon about 1½ tablespoons of the chicken mixture into each biscuit cup, then divide the shredded Mexican blend cheese evenly over the chicken.
Bake for 8–10 minutes, or until the biscuit cups are golden brown and the cheese has melted.
Remove from the oven and top each cupcake with desired toppings such as lettuce, tomato, sour cream, guacamole, and salsa before serving.
