Preheat your oven to 325°F (165°C). Grease and flour a 10-inch Bundt pan or spray it with non-stick baking spray.
In a medium bowl, whisk together the flour, baking powder, and salt. Set aside.
In a large mixing bowl, cream the butter and sugar together until light and fluffy, about 3-5 minutes.
Beat in the eggs one at a time, ensuring each is fully incorporated before adding the next.
Mix in the sour cream, key lime juice, key lime zest, and vanilla extract.
Gradually add the dry ingredients to the wet ingredients, mixing until just combined. Do not overmix.
Pour the batter into the prepared Bundt pan and smooth the top with a spatula. Bake for 1 hour 15 minutes or until a toothpick inserted into the center comes out clean.
Allow the cake to cool in the pan for 15 minutes, then invert it onto a wire rack to cool completely.
In a small bowl, whisk together the powdered sugar and key lime juice until smooth.
Once the cake has cooled, drizzle the glaze over the top. Sprinkle with additional lime zest if desired.