Preheat your oven to 350°F (175°C).
In a large mixing bowl, combine the softened cream cheese and sour cream until smooth.
Stir in the mozzarella cheese, cheddar cheese, sliced mushrooms, pepperoni, garlic powder, Italian seasoning, salt, and black pepper until well mixed.
Transfer the mixture to a baking dish and spread it evenly.
Bake in the preheated oven for 25-30 minutes, or until the dip is hot and bubbly.
Remove from the oven and let it cool for a few minutes. Garnish with chopped green onions before serving.
Serve warm with tortilla chips or sliced baguette for dipping.