Cheesy Scalloped Potatoes with Caramelized Onions Recipe

If you love the comforting, gooey goodness of a classic potato dish, you are going to adore this Cheesy Scalloped Potatoes with Caramelized Onions Recipe. It’s a luscious, layered masterpiece that takes humble potatoes to an entirely new level with rich, creamy cheese sauce and sweet, deeply flavorful caramelized onions. Every bite delivers a perfect balance of textures and tastes that makes this dish irresistible for weeknight dinners or special gatherings. Once you try it, this recipe will become a cherished favorite that everyone asks for again and again.

Ingredients You’ll Need

Sometimes the simplest ingredients come together to create the most extraordinary flavors. Each element here plays a crucial role, from the tender potatoes providing the perfect base, to the caramelized onions adding that sweet depth, and the cheeses delivering that melt-in-your-mouth richness.

• Yukon Gold or Russet Potatoes (2.5 lbs.): These hearty potatoes slice thinly and become tender while baking, making every layer wonderfully creamy.
• Butter (6 tablespoons, separated): Adds richness and helps soften and flavor both the onions and the cheese sauce perfectly.
• Olive Oil (1 tablespoon): Enhances the caramelization of the onions with a subtle, fruity note.
• Yellow Onion (1 large): Thinly sliced and cooked slowly for 30 minutes, these onions transform into sweet, caramelized goodness.
• Dried Thyme (1/2 teaspoon): Infuses a delicate earthiness to complement the sweetness of the onions.
• Garlic (2 cloves, minced): Gives the cheese sauce a gentle kick without overpowering the potatoes.
• Flour (4 tablespoons): The perfect thickener for the velvety cheese sauce that binds it all together.
• Milk (3 cups): Creates a creamy base that balances the richness of the cheese.
• Shredded Orange Cheddar Cheese (3 1/2 cups, divided): Sharp and flavorful, it melts beautifully for that signature cheesy comfort.
• Cream Cheese (2 tablespoons, softened): Adds extra creaminess and tang to the sauce.
• Mustard Powder (1/2 teaspoon): Brightens up the cheese sauce with a subtle, zesty note.
• Salt (1/2 teaspoon): Essential for bringing all the flavors together.
• Pepper (1/4 teaspoon): Adds just the right hint of warmth.
• Cayenne Pepper (pinch): Adds a touch of gentle heat that livens up each bite without overpowering the dish.

How to Make Cheesy Scalloped Potatoes with Caramelized Onions Recipe

Step 1: Preheat and Prep Ingredients

Start by preheating your oven to 350°F (175°C) so it’s ready when you are. While your oven warms up, take this time to get all your ingredients measured and prepared — it makes the process so much smoother later on and lets you focus on each step without rushing.

Step 2: Caramelize the Onions

Slice your onion into 1/4-inch strings for perfect caramelization. Heat 2 tablespoons butter with the olive oil in a large skillet over medium-low heat, then add the onions and thyme. Let them cook for about 30 minutes, stirring often, so they develop a rich golden brown sweetness that will elevate your entire dish.

Step 3: Make the Roux

Turn the heat up to medium and melt the remaining 4 tablespoons of butter in the same skillet. Toss in your minced garlic and cook just for a minute, allowing the wonderful aroma to bloom. Add the flour and whisk continuously for about a minute until the raw flour smell disappears. This step ensures a silky smooth sauce.

Step 4: Create the Cheese Sauce Base

Gradually pour in the milk, whisking constantly. This helps prevent lumps and thickens the sauce beautifully. Bring the mixture to a gentle boil on medium heat, then remove it from heat to avoid scorching.

Step 5: Season the Sauce

Now is the time to refine the flavors. Stir in mustard powder, salt, pepper, and a pinch of cayenne pepper. These spices add layers of complexity to an otherwise simple cheese sauce, making every bite so memorable.

Step 6: Combine Cheese and Onions into the Sauce

Let the sauce cool a bit before mixing in the cheeses. Reserve one heaping cup of shredded cheddar for topping later, and melt the rest gradually into the sauce. Stir in softened cream cheese to add perfect creaminess, then fold in your caramelized onions, distributing their sweet richness evenly throughout the sauce.

Step 7: Slice the Potatoes

Peel your potatoes, rinse, and pat them dry. Slice them thinly—about 1/8-inch thick—to ensure they cook evenly and absorb maximum flavor from the sauce.

Step 8: Layer Your Dish

Lightly grease a 9×13-inch baking dish to prevent sticking. Lay half your potatoes on the bottom, then pour over half the cheese and onion sauce. Repeat the layers, and finally sprinkle the reserved cheese on top for that irresistible golden crust.

Step 9: Bake Covered and Then Uncovered

Cover the dish with foil and bake for 45 minutes to allow the potatoes to soften. Remove the foil and continue baking for 40 more minutes until the top is bubbly and beautifully golden.

Step 10: Optional Broil and Rest

If you want an extra crispy top, broil at 400°F for a few minutes—just keep a close eye so it doesn’t burn. Let the dish rest for 5 to 10 minutes before serving, which helps the flavors settle and makes cutting easier.

How to Serve Cheesy Scalloped Potatoes with Caramelized Onions Recipe

Garnishes

Fresh parsley is an easy and vibrant garnish that adds a burst of color and a hint of brightness to the rich dish. You can also sprinkle some finely chopped chives or a little extra cracked black pepper for a touch more flavor and visual appeal.

Side Dishes

Cheesy scalloped potatoes with caramelized onions pair wonderfully with roasted meats like chicken, pork, or beef. A crisp green salad or some sautéed greens offer a fresh counterpoint to the creamy, cheesy richness on your plate.

Creative Ways to Present

For a fun twist, try serving this dish in individual ramekins for a personalized touch at dinner parties. You could also layer the potatoes and sauce in a cast iron skillet for a rustic presentation that looks as good as it tastes.

Make Ahead and Storage

Storing Leftovers

Once cooled, transfer leftovers to an airtight container and refrigerate for up to 4 days. The flavors actually deepen overnight, making it just as delicious the next day.

Freezing

This cheesy scalloped potatoes with caramelized onions recipe freezes well. Just freeze in a tightly sealed container for up to 2 months. Thaw overnight in the fridge before reheating to maintain texture and flavor.

Reheating

Reheat leftovers in the oven at 350°F until warmed through to keep that nice baked texture. Microwaving works too but may soften the crispy top a bit. Adding a few minutes under the broiler after warming brings back some crispness.

FAQs

Can I use a different type of cheese?

Absolutely! While orange cheddar gives this dish a fantastic flavor and color, feel free to experiment with Gruyère, mozzarella, or Monterey Jack for variations in taste and texture.

Is there a way to make this recipe vegan or dairy-free?

Yes! Substitute the butter with a plant-based margarine, use non-dairy milk like almond or oat milk, and swap the cheeses for vegan alternatives. Keep in mind the flavor and texture will vary slightly.

Can I prepare the sauce ahead of time?

Sure! You can make the cheese sauce and caramelize the onions a day in advance. Keep the sauce refrigerated and assemble just before baking for convenience without sacrificing freshness.

What type of potatoes work best?

Yukon Gold and Russet potatoes are ideal for their texture and ability to absorb flavors. Yukon Golds are creamier, while Russets hold their shape nicely after baking.

Can I add other vegetables to this dish?

Definitely. Thinly sliced mushrooms, spinach, or even roasted red peppers can be layered in for extra flavor and nutrition. Just make sure to keep the slices uniformly thin for even cooking.

Final Thoughts

If you want a dish that feels like a warm hug on a plate, this Cheesy Scalloped Potatoes with Caramelized Onions Recipe is your new best friend. Simple ingredients, thoughtful steps, and that magical combination of creamy cheese and caramelized sweetness make this recipe truly unforgettable. Trust me, once you make it, it will quickly become a staple everyone in your family looks forward to. So grab your potatoes and get cooking — delicious comfort food awaits!

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