Cook bacon in a large skillet over medium heat until crispy. Remove with a slotted spoon and drain on a paper towel-lined plate.
Add diced jalapeños to the skillet with the bacon grease and cook until they are a greenish-brown and fragrant.
While bacon and jalapeños cook, combine the cream cheese, mayonnaise, and 1 1/2 cups of cheddar cheese in a mixing bowl until smooth.
Add cooked bacon and jalapeño to the cream cheese mixture. Stire everything together until completely incorporated.
Transfer the bacon cheese mixture to an oven-safe casserole dish.
Bake for 20 minutes. Carefully remove from the oven and add the remaining 1/2 cup of cheese in an even layer on top of the dip. Place back into the oven for another 5 minutes until the cheese has melted.
Remove from oven and serve warm with your favorite chips.