Cheesy Scalloped Potatoes with Caramelized Onion and Cheddar Recipe

If you are craving a rich, comforting side dish to elevate any meal, look no further than this Cheesy Scalloped Potatoes with Caramelized Onion and Cheddar Recipe. This dish is a luscious marriage of tender, thinly sliced potatoes enveloped in a creamy, cheesy sauce, with the sweet depth of caramelized onions brightening every bite. The sharp cheddar cheese blends seamlessly, creating that perfect golden crust and irresistible gooeyness inside. Whether for a cozy family dinner or a festive holiday table, this recipe promises to win hearts with every forkful.

Ingredients You’ll Need

You only need a handful of simple, wholesome ingredients to create this dish, and each plays a vital role. From the type of potatoes to the creamy cheese sauce, every component contributes to the final texture, flavor, and appearance of the recipe.

• Yukon Gold or Russet Potatoes: These varieties provide a creamy interior and hold their shape beautifully after baking.
• Butter: Used in stages for caramelizing onions and making the roux, it enriches the flavor and gives the sauce a silky texture.
• Olive Oil: Helps prevent butter from burning when caramelizing onions and adds subtle depth.
• Yellow Onion: When slowly cooked, it becomes sweet and golden, adding a wonderful savory complexity.
• Dried Thyme: Offers an earthy herb note that complements the richness perfectly.
• Garlic: Brings a subtle pungency that wakes up the flavors without overpowering.
• Flour: Key for thickening the milk into a luscious sauce.
• Milk: Creates the creamy base for the cheese sauce.
• Cheddar Cheese: The star of the show, providing sharpness, meltability, and that iconic orange color.
• Cream Cheese: Ensures extra creaminess and smoothness in the sauce.
• Mustard Powder: Adds a subtle tang that enhances the cheese flavor without being overt.
• Salt and Pepper: Essential seasoning to balance the richness and bring out all the flavors.
• Cayenne Pepper: Just a pinch for warmth and a hint of spice.

How to Make Cheesy Scalloped Potatoes with Caramelized Onion and Cheddar Recipe

Step 1: Preheat and Prepare

Begin by setting your oven to 350°F (175°C) so it can heat evenly while you handle the prep. Measuring and organizing the ingredients now will make the cooking process smooth and enjoyable.

Step 2: Caramelize the Onions

Slice the yellow onion into thin 1/4-inch strings for perfect caramelization. Melt 2 tablespoons of butter with olive oil in a skillet over medium-low heat, then add the onions with thyme. Take your time, stirring often, as the onions turn a gorgeous golden brown over about 30 minutes. This slow cooking is what brings out their natural sweetness—a game changer in this dish.

Step 3: Start the Sauce

Turn the heat to medium and melt 4 tablespoons more butter in the skillet. Add minced garlic and let it cook just about a minute, releasing dreamy aromas. Next, whisk in flour until it loses its raw taste—this is your roux base that thickens the sauce beautifully.

Step 4: Add the Milk

Slowly pour in the milk while whisking constantly. The sauce will thicken as you bring it to a gentle boil, transforming into a smooth, creamy foundation for all that cheesy goodness.

Step 5: Season the Sauce

Stir in mustard powder, salt, pepper, and a pinch of cayenne. These seasonings subtly boost the depth and complexity of the sauce, elevating every bite.

Step 6: Melt in the Cheese and Onions

Let the sauce cool slightly, then mix in the cream cheese along with most of the shredded cheddar. Save about a cup of cheddar for topping. Fold in your luscious caramelized onions, which will add a sweet, savory burst amid the creamy layers.

Step 7: Prepare the Potatoes

While the sauce cools, peel and rinse your potatoes. Slice them as thinly as possible—around 1/8 inch—to ensure they cook evenly and absorb all that flavorful sauce.

Step 8: Layer the Dish

Grease a 9×13-inch baking dish lightly. Begin by laying down half of your potato slices, then half the cheese and onion sauce. Repeat this layering once more. Finally, sprinkle the reserved cheddar cheese evenly on top for that irresistible golden finish.

Step 9: Bake Covered and Uncovered

Cover the dish with foil and bake for 45 minutes to gently soften the potatoes. Remove the foil and continue baking another 40 minutes to develop the bubbly, golden surface that makes scalloped potatoes so comforting.

Step 10: Optional Broil and Rest

If you want an extra crispy top, broil for just a few minutes at 400°F—but watch carefully to avoid burning. Allow the dish to rest 5 to 10 minutes before serving; this helps the sauce settle and makes plating easier.

How to Serve Cheesy Scalloped Potatoes with Caramelized Onion and Cheddar Recipe

Garnishes

Adding a sprinkle of fresh parsley or chives right before serving brings bright color and a fresh herbal note that balances the richness elegantly.

Side Dishes

This dish pairs wonderfully with roasted meats like chicken, pork, or beef, and complements crisp green vegetables such as sautéed green beans or steamed asparagus for a well-rounded meal.

Creative Ways to Present

For a fun twist, scoop individual portions into ramekins and top with extra cheddar and herbs before broiling. These personal servings make for memorable, cozy dinners or impressive guests treats.

Make Ahead and Storage

Storing Leftovers

Transfer any leftovers to an airtight container and store them in the refrigerator for up to 4 days. The flavors meld beautifully overnight, making the dish even more comforting when reheated.

Freezing

This recipe freezes well if you want to save it for later. Wrap tightly with plastic wrap and aluminum foil before freezing, and it can be kept for up to 2 months. Thaw overnight in the fridge before reheating.

Reheating

Warm up leftovers in the oven at 350°F covered with foil to retain moisture, about 20-30 minutes. For a quicker option, microwave covered but stir halfway through to reheat evenly without drying out.

FAQs

Can I use other types of potatoes besides Yukon Gold or Russet?

Yes, but Yukon Gold or Russet are preferred for their texture and flavor. Waxy potatoes may result in a less creamy texture since they hold their shape firmly.

Is it necessary to caramelize the onions?

Caramelizing the onions adds a rich sweetness and depth that really elevates this scalloped potato recipe. You could skip it, but it’s worth the extra time for the flavor boost.

Can I make this recipe dairy-free or vegan?

It would require substitutions like plant-based milk, vegan butter, and dairy-free cheese alternatives. Expect a different, but still delicious, outcome when using those substitutes.

How thin should the potato slices be?

Around 1/8 inch thick is ideal. Thin slices cook evenly and soak up the creamy sauce without becoming mushy.

Can I double this recipe for a larger crowd?

Absolutely! Just use a larger baking dish or multiple dishes and adjust baking time slightly to ensure the potatoes cook through evenly.

Final Thoughts

This Cheesy Scalloped Potatoes with Caramelized Onion and Cheddar Recipe is one of those timeless dishes that instantly feels like a warm hug from the inside. Its creamy, cheesy layers combined with the sweetness of caramelized onions make it a standout addition to any meal. I encourage you to give it a try and watch it become a beloved classic in your home too.

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