Saute onion in hot oil in a large skillet over medium-high heat until tender. Stir in next 6 ingredients. Reduce heat to low, and cook, stirring often, 5 minutes or until thoroughly heated.
Spoon one-third of sauce mixture in bottom of a lightly greased 13- x 9-inch baking dish. Layer with one-third of tortillas, half of chicken, and 1 cup cheese. Repeat layers with one-third each of sauce mixture and tortillas, remaining chicken, and 1 cup cheese. Top with remaining tortillas, sauce mixture, and 1 cup cheese.
Bake at 350° for 15 to 20 minutes or until golden and bubbly.
*2 pounds lean ground beef, cooked, may be substituted.