Gather all your ingredients.

Place the medium saucepan over medium heat.

Add the cubed Velveeta cheese to the saucepan and stir occasionally as it begins to melt.

Once the Velveeta is mostly melted, stir in the shredded cheddar cheese.

Add the can of diced tomatoes with green chilies.

Slowly add the milk to the mixture.

Sprinkle in the chili powder, cumin, garlic powder, and salt, then taste and adjust the seasoning as needed.

Once everything is well combined and heated through, transfer the queso to a serving bowl.

Serve warm with your favorite chips.