Step 1: Prep the Dish
Preheat the oven to 400°F (204°C). Lightly grease an 8×8-inch casserole dish with nonstick spray or a light coating of butter.

Step 2: Layer the Potatoes and Onions
Layer half of the potato slices in the prepared dish. Arrange them in slightly overlapping rows. Top with half the sliced onions, separating them into rings. Repeat with the remaining potatoes and onions, creating a second layer. This staggered layering ensures even cooking and flavor in every bite.

Step 3: Make the Cheese Sauce
In a medium saucepan over medium heat, melt the butter. Once fully melted and bubbling slightly, whisk in the flour and salt to form a roux. Continue whisking for about 1 minute to cook off the raw flour taste.
Slowly pour in the room-temperature milk, whisking constantly to prevent lumps. Keep stirring until the mixture thickens and coats the back of a spoon — about 4–6 minutes.
Add the shredded cheddar cheese all at once. Stir constantly for 30–60 seconds until the cheese melts completely and the sauce is smooth and glossy.

Step 4: Assemble and Bake
Carefully pour the cheese sauce evenly over the potato and onion layers, ensuring all the slices are covered. Use a spatula or spoon to help the sauce seep down into the layers.
Cover the dish tightly with aluminum foil. Bake in the preheated oven for 85 to 90 minutes, or until the potatoes are fork-tender and fully cooked.

Step 5: Broil for a Golden Top
Remove the foil. Set the oven to broil. Broil the dish for 2–4 minutes or until the top is golden brown and bubbling. Keep a close eye on it to avoid burning.

Step 6: Season and Serve
Remove from the oven and let rest for 10 minutes before serving. Season with additional salt and freshly cracked black pepper to taste.