Yellow squash casserole is creamy, crunchy, and full of classic comfort. Layers of tender squash, rich filling, and buttery cracker topping bake together into a golden, flavorful dish. It’s the perfect side for family dinners or holiday meals.
Preheat oven to 375°Fahrenheit (190°Celsius) and grease a 2-quart casserole dish. Dice onion, shred cheese, and crush crackers ahead of time for easy assembly.
Cut yellow squash into ⅓-inch rounds and place in a bowl; keep slices thick to help them hold their shape while baking.
Melt butter in a skillet, sauté onion for 5–6 minutes until soft and golden, then stir in cream cheese until smooth and creamy.
Combine the onion-cream base with mushroom soup, egg, half the cheddar, salt, and pepper, then pour over squash and toss gently to coat.
In a small bowl, mix crushed crackers with melted butter and remaining cheddar until evenly coated.
Spread the squash mixture in the dish, top with crumb mixture, and bake for 20–25 minutes until golden and bubbly; serve warm.
Notes
Slice squash evenly: Thin, even slices help the squash cook at the same rate so every bite is tender. Uneven cuts can leave some pieces too soft while others stay firm.
Don’t skip the sauté: Cooking the squash and onions a bit before baking removes extra water. This keeps your casserole creamy instead of watery.
Use sharp cheddar: A stronger cheese gives the casserole more flavor without needing a lot. It balances perfectly with the mild, sweet squash.
Add a crispy topping: Crushed crackers or breadcrumbs mixed with butter create a golden crunch. It’s the finishing touch that makes the casserole irresistible.