Baked Potato and Mushroom Casserole

By Rena Awada | Updated On December 16, 2023

This baked Scalloped Potato and Mushroom Casserole is creamy, rich, tasty, and easy to make. A perfect side dish to enjoy during the holidays or all year round.

top view of a white dush with baked potato and mushroom in a creamy and cheese sauce


This baked potato with cheese and mushroom casserole recipe will blow you away because it’s just so delicious. The creamy mushroom sauce is made on the stovetop first by sauteeing the mushrooms with onions and garlic. Once the sauce is done, they are then poured over the scalloped potatoes arranged in a baking dish which is in turned topped with shredded cheese and baked in the oven till soft and cooked through. Our baked scalloped potato side dish casserole is just perfect and pairs so well with all main dishes and a great choice for the holidays. The best part about this recipe is you can make it ahead to save on time.

Why you will love this dish

  • Versatile side dish: This scalloped potato cheese casserole pairs perfectly with any main dish you can think of especially main proteins like this baked teriyaki salmon or this maple glazed chicken breast recipe.
  • Very tasty: We can’t even explain in more simple words how good this baked potato and mushroom casserole dish is. You have got to try it yourself.
  • A great make-ahead recipe: You can easily make this ahead the day before. Prep this dish halfway through a day until right before you bake it in the oven.
top view yellow in color cheesy potato and mushroom casserole in a white dish

Ingredients you will need

  • Olive oil: or any oil of choice. Avocado oil works
  • Mushrooms: there are many types of mushrooms out there you can pick from but we prefer using button mushrooms for this recipe.
  • Garlic cloves: do use garlic cloves instead of garlic powder.
  • Onion, thinly sliced: Use white or sweet onions. If you only have purple on hand that’s fine.
  • Gluten-free flour (or 1/3 cup all-purpose flour)
  • Vegetable broth: to keep this dish vegetarian-friendly, use vegetable broth. If you only have chicken stock, you can use it.
  • Soy sauce: use low sodium or coconut aminos
  • Milk of choice: any milk works, but keep in mind fat-free or dairy-free milk won’t give a rich creamy outcome. But they will still work, and the outcome varies slightly.
  • Kosher salt and ground pepper, to taste
  • Russet or Gold Potatoes, peeled and thinly sliced
  • Grated parmesan cheese, divided; you may grate your own or get store-bought.
  • Grated cheddar cheese: use light or gat free. we used cheddar but you may use other types of shredded cheese.
  • Optional: freshly chopped parsley, to garnish
ingredients to make baked scalloped potato and mushroom casserole

How to make this baked scalloped potato casserole

  • Preheat the oven to 375F. Butter a 9” x 13” baking dish. Set aside.
  • Cook the mushrooms: In a rimmed pan, heat the oil. Add the mushrooms and saute for 5-7 minutes, stirring occasionally.
  • Add the onions and garlic: Once the excess liquid has evaporated, stir in the onions and garlic and continue to saute for 3-4 minutes.
sauteed mushooms in a skillet
  • Start to make the sauce: Stir in the flour, then pour the broth, little by little, while stirring to remove any lumps. Add the soy sauce, milk, and salt and pepper.
onions added over sauteed mushrooms in a black skillet
  • Cook the mushroom sauce: The gravy will be a bit salty but don’t worry, potatoes will absorb a lot and reduce the salty flavor. Cook until the sauce starts to thicken and coat the back of a spoon. Set aside.
  • Prepare the baking dish: Drizzle a bit of oil and grease a 9×13 baking dish.
  • Add potatoes to the dish: Layer half of your potato slices and top with half of the mushroom gravy. Stir a bit to get the sauce through the potato slices. Sprinkle half of the grated parmesan cheese.
mushroom sauce added over scalloped potatoes in a white dish
  • Assemble: Repeat with layers and top with the cheddar cheese.
  • Bake: Cover the baking dish with aluminum foil and bake for 1 hour; Remove foil and continue to bake uncovered for about 25-30 minutes or until the top is golden-brown.
  • Serve: Allow the dish to cool for 15 minutes, then garnish with parsley, if desired
top view of white dish with baked creamy potato and mushrooms topped with yellow cheddar cheese

What to serve with potato casserole

top view of a white dish with creamy potato and mushroom casserole with spoon in the dish

Frequently asked questions

Why do you cover casserole when baking?

It is recommended to cover the casserole dish with aluminum foil for most of the baking time to ensure that the content is cooked through evenly, stays moist, and prevents the dish from burning before it is cooked through. The foil helps trap the moisture back into the dish.

Can I use foil instead of a casserole lid?

Using foil instead of a casserole lid is just as effective when baking casseroles. You may double up on the foil and make sure it is tightly secure around the dish to prevent air from escaping. So if you do not have a casserole lid, use foil!

How long should a casserole be cooked for?

It all depends on what you are making. the time will vary between 1 hour to 3 hours depending on the content in your baking dish. Potato casseroles will take about 1-1.5 hours, whereas other types of meats will take anywhere between 2-3 hours.

What can I cover my casserole with if I don’t have foil?

The first choice would be choosing a lid that will tightly fit the dish, if not, then your next option will be to use parchment paper. You just need to make sure it is secured well and the air is trapped in the dish.

top close up view of baked cheesy potato and mushroom casserole with spoon on the lower left side of the dish

recipe notes and tips

  • Thinly slice the potatoes. Use russet, golden, or Yukon gold potatoes
  • Use any mushroom of your choice. We used button mushrooms and prefer it over the others but other types of mushrooms will work. If you want to improvise and use canned mushrooms you can. But of course fresh tastes best.
  • You may use avocado oil instead of olive oil, or any other neutral-tasting oil.
  • Want to make it ahead? you can. Once you add the sauce over the scalloped potatoes and add some shredded cheese, cover it with foil and place it in the fridge until ready to bake. It will hold for 2 days.
  • You do not have to use cheddar cheese. You may use any other cheese of your choice.
  • Consider adding some cauliflower florets. This cuts down on the carb content and adds some fiber as well.
  • Do not skip covering the casserole while baking. The potatoes need to cook evenly without drying out or burning.
close up top view of baked potato and mushroom casserole topped with cheese

Storage and reheating

  • Storing: store leftovers in a sealed container in the fridge for up to 4 days. Or you may freeze for up to 3 months.
  • Reheating: It is best to reheat in the microwave. Reheat for 60-90 seconds at a time until it is heated through.

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top view of a white dish with creamy potato and mushroom casserole with spoon in the dish

Baked Potato and Mushroom Casserole

This potato casserole dish is tasty, easy to make, and made with potatoes, mushrooms, onions, shredded cheese, and other simple ingredients. Ready in just one hour. A perfect side dish to serve all year round.
5 from 1 vote
Print Pin Rate
Course: Side Dish
Cuisine: American
Diet: Vegetarian
Prep Time: 15 minutes
Cook Time: 1 hour 30 minutes
Total Time: 1 hour 45 minutes
Servings: 8
Calories: 306kcal
Author: Rena

Equipment

  • 9” x 13” baking dish
  • knife
  • pan or skillet

Ingredients

  • 3 tbsp olive oil or avocado oil
  • 1 lb mushrooms sliced
  • 4-6 garlic cloves pressed
  • 1 medium onion thinly sliced
  • 3 tbsp gluten-free flour or 1/3 cup all-purpose flour
  • 3/4 cup vegetable broth
  • 1/4 cup soy sauce
  • 2 cups milk of choice we used 2 %
  • Kosher salt and ground pepper to taste
  • 2 lb Russet or Gold Potatoes peeled and thinly sliced
  • 1 cup grated parmesan cheese divided
  • 1 cup grated cheddar cheese
  • Optional: freshly chopped parsley to garnish

Instructions

  • Preheat the oven to 375F. Butter a 9” x 13” baking dish. Set aside.
  • In a rimmed pan, heat the oil. Add the mushrooms and saute for 5-7 minutes, stirring occasionally. Once the excess liquid has evaporated, stir in the onions and garlic and continue to saute for 3-4 minutes.
  • Stir in the flour, then pour the broth, little by little, while stirring to remove any lumps.
  • Add the soy sauce, milk, and salt and pepper.
  • The gravy will be a bit salty, but don't worry, potatoes will absorb a lot and reduce the salty flavor.
  • Cook until the sauce starts to thicken and coat the back of a spoon. Set aside.
  • Drizzle a bit of oil and grease a 9×13 baking dish.
  • Layer half of your potato slices and top with half of the mushroom gravy. Stir a bit to get the sauce through the potato slices. Sprinkle half of the grated parmesan cheese.
  • Repeat with layers and top with the cheddar cheese.
  • Cover the baking dish with aluminum foil and bake for 1 hour; Remove foil and continue to bake uncovered for about 25-30 minutes or until the top is golden-brown.
  • Allow the dish to cool for 15 minutes, then garnish with parsley, if desired.

Notes

  • use any milk of your choice 
  • russet or golden yellow potatoes work
  • any mushroom of your choice, button mushrooms will be optimal
  • Use low-fat cheese if possible 
  • Nutritional values are just an estimation that is calculated automatically. Values may vary

Nutrition

Calories: 306kcal | Carbohydrates: 32g | Protein: 14g | Fat: 15g | Saturated Fat: 6g | Polyunsaturated Fat: 1g | Monounsaturated Fat: 6g | Cholesterol: 28mg | Sodium: 873mg | Potassium: 822mg | Fiber: 3g | Sugar: 6g | Vitamin A: 414IU | Vitamin C: 9mg | Calcium: 310mg | Iron: 2mg
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