Preheat a smoker to 250°F. Set it up for indirect cooking according to the manufacturer’s instructions.

In a large mixing bowl, combine the ground turkey, breadcrumbs, egg, milk, salt, black pepper, and garlic powder. Mix gently until evenly combined, taking care not to compact the mixture.

In a small bowl, stir the softened cream cheese and pesto together. Fold in the chopped roasted red peppers.

Place the turkey mixture on a sheet of parchment paper and shape it into a rectangle about ¾ inch thick. Spread the cream cheese mixture down the center, leaving a border around the edges. Use the parchment to lift one long side of the turkey mixture over the filling, then bring the other side over it. Pinch the seam and ends closed, and shape the loaf so the filling is fully enclosed.

Brush the outside of the loaf with olive oil. Transfer it to a smoker-safe pan or a piece of sturdy foil, keeping the seam underneath.

Smoke until the center of the turkey reaches 165°F on an instant-read thermometer. Check the temperature in the meat, avoiding the cream cheese filling.

Carefully remove the loaf from the smoker and let it rest for 10 minutes before slicing. This helps the filling settle and makes cleaner slices.