Browned sausage and mushrooms, bread, eggs, cheese and homemade mushroom gravy come together in this delicious make-ahead breakfast casserole.

slices of sausage and mushroom breakfast casserole on plates

This recipe is sponsored by Challenge Butter.

Growing up, we always headed to my grandparents house for breakfast on Christmas morning after opening our presents. And for as long as I can remember, my grandma had this sausage and mushroom breakfast casserole hot and ready for us.

I’ve recreated her recipe with a few updates, but it’s just as delicious and satisfying as I remember. It’s the perfect savory make-ahead breakfast dish for special occasions!

closeup of a slice of sausage and mushroom breakfast casserole

A delicious make-ahead breakfast casserole

You’ll love the combination of flavors in this breakfast casserole! It starts with a base of bread cubes, then eggs, followed by browned sausage, mushrooms and onions, and then a generous amount of cheddar cheese.

What makes this dish so special is the creamy mushroom gravy that you spoon over the top. It helps the casserole stay moist and gives the dish so much great flavor. My grandma used a can of cream of mushroom soup, but I’ve made mine from scratch. And you can use either option!

Like many breakfast casseroles, it can be assembled the night before and baked fresh in the morning. So you can have a tasty homemade breakfast without any effort the morning of!

ingredients needed for sausage and mushroom breakfast casserole

Ingredients you’ll need

Let’s get baking! Here’s what you need to make this sausage and mushroom breakfast casserole (full recipe below):

  • Salted Challenge Butter
  • Ground sausage
  • Button, cremini or baby bella mushrooms
  • Onion
  • Cheddar cheese
  • Eggs
  • French or artisan bread, or other white bread
  • Milk, preferably whole or 2%
  • All-purpose flour
  • Salt and pepper
  • Fresh chives, for garnish (optional)

Why I bake with Challenge Butter

Butter lends its delicious flavor throughout this entire dish— it’s used to sauté the mushrooms and onions, forms the base of the homemade gravy, and is melted and mixed with the eggs before assembling the casserole.

I use Challenge Butter in my baking because I trust that it’s of the highest quality and made with the freshest cream from local family-owned dairy farms. Challenge Butter is churned fresh daily, and always has been since it was established 100 years ago in 1911.

Find Challenge Butter sold near you!

browned sausage and mushrooms, making homemade gravy

How to make this sausage and mushroom breakfast casserole

1. Brown sausage, mushrooms and onions. Brown sausage in a skillet until cooked through, then set aside. Melt butter in the skillet and cook mushrooms and onions until soft, then set aside with sausage.

2. Make gravy. Melt more butter in the skillet and whisk together with flour to make a roux. Cook for about 1 minute, then add milk while whisking constantly to incorporate. Bring gravy to a boil while whisking, making sure to scrape up all of the browned bits from the bottom of the skillet. Season with salt and pepper to taste, and remove from heat once thickened.

assembling sausage and mushroom breakfast casserole

3. Assemble casserole. Grease a 9×13-inch baking dish with butter and spread bread cubes into an even layer. Whisk together eggs, milk, and melted butter and pour over the bread cubes. Use a spoon or spatula to press any pieces of dry bread down into the egg mixture so that it’s all evenly coated.

Layer the sausage, mushrooms and onions, and half of the cheese into the baking dish. Spoon gravy over the top, and then add the remaining cheese.

4. Chill. Cover the casserole dish with foil and chill for at least 4 hours in the fridge.

5. Bake. Preheat oven to 350°F and bake casserole for 45-60 minutes until casserole is puffed and completely set in the middle, removing the foil for the last 10-15 minutes of baking. If desired, sprinkle with fresh chives after baking.

Then, serve and enjoy immediately!

baked sausage and mushroom breakfast casserole

Tips for making this breakfast casserole

  • You can bake this casserole immediately after assembling, but I recommend chilling it for at least 4 hours so the bread has time to soak up the egg mixture. It’s perfect for making the night before, and can be stored in the fridge for up to 24 hours before baking.
  • If you’d like to skip the homemade gravy step and make it the old-fashioned way my grandma did, you can use a can of cream of mushroom soup instead. Warm it up so it has a more spreadable consistency, then spoon it over the casserole in place of the gravy.
  • You’ll know the breakfast casserole is done when there are no jiggly bits of filling in the center. Gently shake the dish and if it’s completely set, it’s ready!
  • This sausage and mushroom breakfast casserole also reheats well after it’s been baked. Warm the entire dish, covered, in a 300°F oven for about 30 minutes. You can also enjoy leftover slices reheated in the microwave.
  • Looking for a few sides to serve alongside this dish? If you’re serving a larger crowd, or if it’s for a special occasion I recommend my easy no-knead cinnamon rolls, best ever fruit salad, and mimosa punch.

box of Challenge Butter with slices of breakfast casserole

More make-ahead breakfast ideas

Shop tools for this recipe


Sausage and Mushroom Breakfast Casserole

A combination of browned sausage and mushrooms, bread, eggs, cheese and homemade mushroom gravy make up this delicious sausage and mushroom breakfast casserole.

Ingredients

  • ½ lb ground sausage
  • 8 ounces button or cremini mushrooms , sliced
  • 1 cup chopped onions (½ medium onion)
  • 6 tablespoons Challenge Salted Butter , divided
  • 2 tablespoons all-purpose flour
  • 2 cups milk , divided (whole or 2%)
  • About 1 teaspoon salt , to taste
  • About ½ teaspoon ground black pepper , to taste
  • 12 large eggs
  • 1 ½ cups shredded cheddar cheese
  • 6 cups cubed French, artisan or other white bread (about 8 slices)
  • Chopped fresh chives , for garnish (optional)

Instructions

  • In a large skillet set over medium high heat, cook sausage until browned and cooked all the way through. Remove from skillet and set aside.
  • Add mushrooms and onions to the skillet and season with salt and pepper. Cook, stirring occasionally until softened, about 5 minutes. Remove from skillet and set aside with sausage.
  • Melt 2 tablespoons of butter to the skillet and add flour. Whisk to form a thick paste and cook for about 1 minute. Add 1 cup of milk gradually to the pan while whisking constantly. Bring to a simmer, stirring until sauce is smooth and thickened. Season with salt and pepper to taste. Set aside.
  • Melt the remaining ¼ cup butter in a dish. Whisk the butter with the remaining 1 cup of milk and the eggs. Add ½ teaspoon of salt and ¼ teaspoon pepper.
  • To assemble breakfast casserole, grease a 9x13 inch pan with butter. Spread bread cubes into an even layer in the pan. Carefully pour egg mixture over the bread cubes, making sure all the bread is moistened. Scatter sausage, mushrooms and onions evenly in the pan. Top with half of the cheese.
  • Spoon sauce over the casserole in heavy drizzles so there will be pockets of sauce among the other ingredients. Top with the rest of the cheese. Use the back of a spoon to gently push everything down into an even layer, and to make sure there are no dry pieces of bread.
  • Cover with foil and chill in the fridge overnight, or at least 4 hours.
  • When ready to bake, preheat oven to 350°F. Bake casserole covered for 45-60 minutes until casserole is puffed and set, taking off foil for the last 10-15 minutes.
  • Top with chives if desired. Serve immediately.

Notes:

  • You can bake this casserole immediately after assembly, but chilling for at least 4 hours is recommended.
  • This casserole can be chilled in the fridge for up to 24 hours before baking.
  • If desired, you can use a can of cream of mushroom soup in place of the homemade gravy in this recipe. Warm it up so it has a spreadable consistency before spooning over casserole.

Nutrition

Calories: 326kcal, Carbohydrates: 16g, Protein: 16g, Fat: 22g, Saturated Fat: 11g, Polyunsaturated Fat: 2g, Monounsaturated Fat: 7g, Trans Fat: 1g, Cholesterol: 211mg, Sodium: 644mg, Potassium: 285mg, Fiber: 1g, Sugar: 4g, Vitamin A: 635IU, Vitamin C: 2mg, Calcium: 239mg, Iron: 2mg
Have you tried this recipe?I’d love to hear about it! Leave a review below or take a photo and tag it on Instagram @completelydelicious with #completelydelicious.

Disclosure: This recipe was created in partnership with Challenge Dairy, Inc. Thank you for supporting partnerships with brands I love and believe in, which make Completely Delicious possible. All opinions are always 100% my own. To learn more about Challenge Dairy, you can visit their website here. You can also find them on facebookinstagramyoutube, and pinterest.