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Cheesy Potatoes in Oven – Carlsbad Cravings

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If you’re looking for the ultimate cheesy potato casserole, you’ve just struck gold—Yukon gold, to be exact. This recipe isn’t your average throw-it-together side dish; it’s a next-level comfort food experience crafted by someone who knows their way around creamy sauces, melting cheeses, and flavor-packed magic without ANY canned soups!  With step-by-step photos, expert tips, and a carefully crafted technique, this recipe guarantees a from-scratch potato casserole that puts every “cream of” shortcut to shame.

top view of cheesy potatoes showing how cheesy and creamy they are

 

You are sure to love this Recipe for Cheesy Potatoes!

This recipe is proven, foolproof and a must-have for your weeknight or special occasion lineup. Here’s why you’ll love it:

  • No Canned Soups Needed: Ditch the mystery cans! This recipe features a luxurious, made-from-scratch sauce, a tried and tested favorite used in my Chicken Divan, Tuna Casserole, Hashbrown Casserole, and more!
  • Flavor-Packed: With layers of Dijon, Worcestershire, herbs, and spices, this casserole is anything but bland—it’s savory, balanced, and downright addictive.
  • Ultra Creamy Texture: Pre-boiling the potatoes ensures they bake up irresistibly tender, even, and creamy—no hard or undercooked bites here!
  • Two Kinds of Cheese: A combo of sharp cheddar and Gruyere means ultra-flavorful, melty magic in every bite with unparalleled flavor.
  • So Saucy: Generous amounts of creamy sauce mean zero dryness and maximum comfort food satisfaction.
  • Make-Ahead Magic: This recipe is perfect for prepping in advance! Assemble up to two days ahead, then bake and enjoy when ready.
up close of cheesy potatoes recipe showing how cheesy they are

Cheesy Potato Recipe Ingredients

Let’s take a closer look at what you need to make this recipe (measurements in the printable recipe card at the bottom of the post):

  • Potatoes: Use Yukon Gold potatoes for their naturally creamy texture. They hold up well and don’t disintegrate or taste mealy. Look for larger potatoes, which make peeling quicker.
  • Homemade Cream of Chicken Soup:  This sauce is epic.  It begins with a roux that’s whisked with chicken broth, milk, and spices. Cornstarch helps thicken and stabilize the sauce, while Dijon mustard and Worcestershire sauce add brightness and savory depth.
  • Spices: A flavorful mix of salt, pepper, onion powder, garlic powder, dried parsley, and a pinch of cayenne adds depth, warmth, and balanced seasoning throughout the casserole—there are no bland bites here!
  • Sharp Cheddar:  Freshly shredded cheddar adds bold, tangy richness and savory sharpness.
  • Gruyere: This is the consummate melting cheese that’s slightly sweet, slightly salty, creamy, nutty, and boasts enough flavor to cut through the richness of the casserole.
  • You will likely have the option between regular Gruyère and smoked Gruyère cheese. I recommend using regular for this recipe, as the smoked flavor is quite strong and better suited for single-layering, such as in French Onion Chicken or Monte Cristo Sandwiches.
  • Chicken bouillon: This imparts a complex, savory goodness to the cheesy sauce (it’s like salt with FLAVOR). You may use bouillon powder, bouillon cubes or bouillon base (like Better Than Bouillon or Zoup!).  Add it to the sauce without dissolving it in liquid first. 
  • Sour Cream: Adds a slight tanginess and fabulous creaminess. Full-fat sour cream melts easier than nonfat, but you can use nonfat with this knowledge. 
  • Topping: Panko is a Japanese breadcrumb and can be found next to traditional Italian breadcrumbs at your grocery store.  Panko breadcrumbs are lighter, larger, and drier than regular breadcrumbs, absorbing less moisture and resulting in a crispy topping.
top view showing cheesy potato ingredients: Yukon gold potatoes, cheddar, Gruyere, butter, chicken broth, milk, butter, flour, spices

How to make Cheesy Potato Casserole with Diced Potatoes

Let’s take a closer look at how to make this recipe with step-by-step photos (full recipe in the printable recipe card at the bottom of the post):

  • Step 1: Cook Potatoes. Boil the potatoes until they are fork-tender.
showing how to make cheesy potatoes by boiling diced potatoes until tender
  • Step 2: Make the Homemade Cream of Chicken Soup. Cook the flour in melted butter for 2 minutes to make the roux. Gradually whisk in the milk and part of the broth. Whisk the cornstarch with the remaining broth, then add it to the pot. Next, add the Dijon, Worcestershire sauce, chives, chicken bouillon, and all the spices.
showing how to make cheesy potatoes by cooking the flour in melted butter for 2 minutes to make the roux. Gradually whisk in the milk and 1 ½ cups of chicken broth. Whisk the cornstarch with the remaining chicken broth, then add it to the pot. Next, add the Dijon, Worcestershire sauce, chives, chicken bouillon, and all the spices and spices.
  • Step 3: Thicken the Sauce. Bring the sauce to a simmer, whisking constantly, until it has thickened, about 5 minutes.
showing how to make cheesy potatoes by simmering the sauce until thickened
  • Step 4: Add Cheese. Whisk in the cheddar until melted, followed by the Gruyere cheese until melted. Whisk in the sour cream until blended.
showing how to make cheesy potatoes by stirring the cheese until melted, followed by the sour cream
  • Step 5: Add the Potatoes. Combine the boiled potatoes and the sauce
showing how to make cheesy potatoes by adding the cheese to the sauce and stirring to combine
  • Step 6: Bake. Add the potatoes to a 9×13 casserole dish, top with cheese and bake until hot and bubbly.
showing how to make cheesy potatoes by topping with cheese and baking
  • Step 7: Panko Topping. Meanwhile, melt the butter and olive oil together over medium heat in a large skillet. Add the panko and cook until the crumbs become golden brown.
showing how to make cheesy potatoes by toasting the panko in a skillet
  • Step 8: Dig in! Evenly sprinkle the panko over the potatoes. Let the potato casserole stand for 10 minutes.
showing how to make cheesy potatoes by topping the casserole with crispy panko after baking

Tips for Cheesy Diced Potatoes

  • Don’t overboil the potatoes: They should be fork-tender, but not falling apart, or else they will continue to fall apart as you combine them with the sauce.
  • Shred your own cheese: Pre-shredded cheese contains anti-caking agents that prevent smooth melting. Freshly shredded cheddar and Gruyere melt like a dream.
  • Cook the flour thoroughly: Thoroughly cooking the roux removes the raw flour taste and ensures the flour is fully activated to properly thicken the sauce, making it extra velvety without being gritty or pasty.
  • Simmer the sauce until thick: It should appear slightly thick after simmering because it will thin out once baked with the potatoes. 
  • Half casserole. This casserole makes a reasonable amount, and the leftovers are fantastic!  If you don’t want leftovers, use the arrows in the recipe card to half the recipe and make it in an 8- or 9-inch square pan.
  • Let it rest before serving: After baking, give the casserole a few minutes to settle and set up for cleaner scooping and better texture.
up close of cheesy potatoes recipe showing how cheesy they are

Cheesy Potato Recipe Variations

  • Gluten Free: Eliminate the flour and increase the cornstarch to 3 ½ tablespoons. Double-check that the Worcestershire sauce is gluten-free. Use gluten-free panko. My favorite is Aleia’s Gluten Free Real Panko Original. It is the crunchiest panko I’ve found!
  • Bacon Lover’s Cheesy Potatoes: For irresistible smoky flavor and crunch, add crispy crumbled bacon, either mixed into the casserole or sprinkled on top before baking-or both!
  • Cheesy Ham and Potato Casserole: Stir in diced ham for a heartier, protein-packed version that turns this into a full meal.
  • Loaded Baked Potato Casserole: Top with extra cheddar, sour cream, green onions, and bacon for all the classic flavors of a baked potato in casserole form.
  • Spicy Jalapeño Cheddar Potatoes: Add chopped pickled or fresh jalapeños and use pepper jack cheese alongside the cheddar for a kick of heat.
  • Veggie-Packed Casserole: Reduce the potatoes and mix in steamed broccoli, cauliflower, sautéed mushrooms, or bell peppers.
  • Southwest Cheesy Potatoes: Mix in taco seasoning, black beans, and green chiles, and top with crushed tortilla chips before baking for a Tex-Mex twist.
picking up a serving spoonful of cheesy potatoes recipe

How to serve this Recipe for Cheesy Potatoes

top view of showing how to serve cheesy potatoes recipe in a bowl garnished with green onions and parsley
up close of recipe for cheesy potatoes in a bowl showing how cheesy and creamy they are

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  • 4 pounds Yukon gold potatoes, peeled and chopped into 1/2-inch pieces (about 9 cups)
  • 1 tablespoon salt for boiling
  • 6 tablespoons unsalted butter (may sub half olive oil)
  • 1/3 cup all-purpose flour
  • 2 cups milk
  • 1 14.5 oz. can (1 ¾ cups) low sodium chicken broth
  • 1 tablespoon cornstarch
  • 1 1/2 teaspoons Dijon mustard
  • 1 teaspoon Worcestershire sauce
  • 2 tablespoons chopped fresh chives or 2 tsps dried
  • 2 tsp EACH chicken bouillon, dried parsley
  • 1 1/2 teaspoons salt
  • 1 tsp EACH onion powder, garlic powder
  • 1/2 teaspoon pepper
  • Pinch of cayenne
  • 2 cups freshly shredded sharp cheddar cheese (semi-packed)
  • 3 oz. (1 packed cup) freshly shredded Gruyere cheese
  • 1 cup sour cream

  • Sour Cream: Measure before prepping the potatoes so it can come to room temperature.

  • Boil Potatoes: Add the diced potatoes to a large pot or Dutch oven and add enough cold water to cover them by about 1 inch. Cover and bring to a boil, then uncover and add one tablespoon of salt. Continue to boil (uncovered) until the potatoes are fork tender but not falling apart, about 4-5 minutes after the water starts to boil. Immediately drain the potatoes in a colander. (While the potatoes are cooking, you can continue with the recipe.)
  • Prep: Preheat the oven to 350°F. Lightly spray a 9×13 baking dish with nonstick cooking spray; set aside.
  • Make Sauce: Melt the butter in a Dutch oven over medium heat. Whisk in the flour, then cook while stirring for 2 minutes. Reduce the heat to low, then gradually whisk in the milk and 1 ½ cups of chicken broth (eyeball it). Whisk the cornstarch with the remaining chicken broth, then add to the pot, followed by the Dijon, Worcestershire sauce, chives, chicken bouillon, and all spices.

  • Thicken Sauce: Bring the sauce to a simmer, whisking constantly, until it has thickened, about 5 minutes.

  • Add Cheeses: Turn off the heat, and whisk in the cheddar a handful at a time until melted, followed by the Gruyere until melted. If it’s not melting smoothly, return the heat to low and whisk until melted. Off heat, whisk in the sour cream until blended, then stir in the cooked potatoes. Adjust seasonings to taste (we like a little more salt).

  • Assemble: Transfer the potatoes to the prepared baking dish and spread them into an even layer. Evenly top with one cup of shredded cheddar.

  • Bake: Cover the casserole with foil and bake at 350 degrees for 25 minutes, until hot and bubbly and the cheese is melted. Let the casserole stand uncovered for 10 minutes to set a bit before serving. Meanwhile, make the panko topping:

  • Panko topping: Melt the butter and olive oil together over medium heat in a large skillet. Add the panko and stir to coat. Continue cooking until the crumbs become golden brown. Evenly sprinkle over the potatoes. Garnish with fresh parsley if desired.

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