Zest the lime using a fine cheese grater and set aside. Make sure to only grate the green part, as the white pith underneath can taste bitter.

In a large mixing bowl, add the softened cream cheese. Use a hand mixer or a stand mixer to beat the cream cheese until it’s smooth and creamy, making sure there are no lumps. This step is key for achieving a silky dip texture.

Add the sweetened condensed milk, key lime juice, sugar, and most of the lime zest (remember to reserve a bit for garnish). Mix everything together until it’s well combined and the mixture is light and fluffy. Take a quick taste to make sure the balance of sweet and tart is just right.

Gently fold in the whipped topping - be careful not to overmix.

Transfer the dip to a serving bowl and smooth out the top. Sprinkle the reserved lime zest over the dip for a fresh pop of color and flavor. Refrigerate for about 1 hour to let the flavors meld together.

Serve with graham crackers, pretzels, or fresh fruit for dipping!