Prep your pans and oven: Heat oven to 350°F (175°C).
Grease and line cake pans with parchment. Lightly flour the sides. This helps the layers release cleanly.
Rub zest into sugar: In a large bowl, combine sugar and lemon zest.
Use your fingers to rub the zest into the sugar until fragrant and pale yellow. This releases the oils and boosts flavor.
Cream the fats: Add butter to the lemon sugar and beat until light and fluffy, 3–4 minutes. Mix in the oil until fully combined.
Add eggs and vanilla: Beat in the eggs one at a time, scraping the bowl after each addition.
Stir in vanilla. The batter should look smooth and slightly thick.
Mix dry ingredients: In a separate bowl, whisk flour, baking powder, baking soda, and salt. This distributes the leavening evenly.
Combine wet ingredients: In a measuring cup, whisk milk, lemon juice, and sour cream.
It may look slightly curdled; that’s normal.
Bring it together: Add the dry ingredients to the butter mixture in three additions, alternating with the milk mixture. Start and end with dry. Mix on low just until combined to avoid overworking the gluten.
Portion and bake: Divide batter evenly among pans.
Smooth the tops. Bake 22–28 minutes for 8-inch pans (a bit longer for 9-inch), until the centers spring back and a toothpick comes out clean.
Make the lemon syrup: While cakes bake, simmer lemon juice and sugar in a small pot for 1–2 minutes, just until the sugar dissolves. Cool slightly.
Cool and brush: Let cakes cool in pans 10 minutes, then turn onto racks.
Peel off parchment. While still warm, brush tops with lemon syrup. This adds moisture and a gentle tang.
Chill the layers: Cool completely.
For easiest assembly, wrap and chill layers 30–60 minutes. Cold layers are less crumbly.
Make the frosting: Beat the butter until creamy. Add cold cream cheese in chunks and beat until smooth.
Mix in vanilla, lemon zest, and a pinch of salt. Gradually add powdered sugar, then lemon juice to taste, beating until fluffy. Adjust with more sugar for stability or more juice for tang.
Assemble: Place one cake layer on a board.
Spread a generous, even layer of frosting. Top with the second layer, add more frosting, then the final layer upside down for a flat top. Apply a thin crumb coat and chill 20 minutes.
Finish and decorate: Frost the top and sides smoothly.
Add simple swirls, thin lemon slices, or a sprinkle of zest. Keep decorations light so the cake remains the star.