I’ve always had a soft spot for those comforting, creamy trays of scalloped potatoes you can grab from the Costco deli, but making them at home is a game-changer.

There is something incredibly satisfying about slicing the potatoes myself and smelling the garlic and cheese bubbling away in my own oven.

When I finally nailed this Costco Scalloped Potatoes Recipe, my kitchen smelled like heaven, and the taste was even better than the store-bought version. It’s rich, savory, and has that perfect golden crust that I always fight my family for.

Ingredients

To get that classic creamy texture and rich flavor, you need the right balance of starchy potatoes and quality dairy. Here is everything you need to recreate this comfort food classic.

3 tablespoons butter – I use unsalted butter so I can control the saltiness of the dish; it forms the base of the rich roux.
1 small white or yellow onion – Peel and slice this thinly; it adds a sweet, savory depth that melts right into the sauce.
4 large garlic cloves – Mince these fresh for the best flavor; garlic is essential for that signature savory kick.
1/4 cup all-purpose flour – This thickens your sauce, ensuring it clings to every slice of potato instead of being watery.
1 cup chicken or vegetable stock – This lightens the sauce slightly while adding a savory backbone that milk alone can’t provide.
2 cups whole milk – You really need whole milk or half-and-half here for the creaminess; skim milk just won’t give you that luxurious texture.
1 1/2 teaspoons Kosher salt – Potatoes need plenty of salt to bring out their flavor, so don’t skimp here.
1/2 teaspoon black pepper – Freshly cracked black pepper adds a nice bit of heat to cut through the richness.
2 teaspoons fresh thyme leaves – Fresh herbs make a huge difference; thyme adds an earthy, aromatic note that pairs perfectly with cheese.
4 pounds Yukon Gold Potatoes – I prefer Yukon Golds because they are naturally buttery and hold their shape better than Russets. Slice them about 1/8-inch thick.
2 cups sharp cheddar cheese – Grate this yourself from a block! Pre-shredded cheese has anti-caking agents that stop it from melting smoothly.
1/2 cup Parmesan cheese – Use freshly grated Parmesan for a salty, nutty finish that crisps up beautifully on top.

Note: This recipe yields approximately 8 to 10 hearty servings.

Variations

While this recipe is delicious as is, it’s also a fantastic canvas for adding your own personal twist or dietary adjustments.

Add Protein: Layer in diced ham or crumbled bacon between the potatoes for a smoky, meaty version that eats like a main course.
Gluten-Free: Swap the all-purpose flour for a 1:1 gluten-free flour blend to make the roux, ensuring everyone can enjoy it.
Cheese Swap: If you aren’t a fan of cheddar, try using Gruyère or Fontina; both melt beautifully and add a sophisticated, nutty flavor.
Spicy Kick: Add a pinch of cayenne pepper or a chopped jalapeño to the cream sauce if you like a bit of heat with your potatoes.

Cooking Time

This dish takes a little patience, but the result is absolutely worth the wait.

Prep Time: 25 minutes
Cooking Time: 1 hour
Total Time: 1 hour 25 minutes

Equipment You Need

You don’t need a professional kitchen, just a few reliable tools to make this process smooth.

9×13 inch baking dish – Essential for layering the potatoes and holding all that delicious sauce.
Large sauté pan – Used to cook the onions and prepare the creamy béchamel sauce.
Whisk – Crucial for smoothing out the roux and ensuring there are no lumps in your sauce.
Mandoline slicer or sharp knife – A mandoline helps get perfectly even, thin potato slices for consistent cooking.
Cheese grater – For grating your own fresh cheese, which melts superiorly compared to bagged varieties.

How to Make Costco Scalloped Potatoes Recipe?

Making these potatoes is all about building layers of flavor. You start by making a flavorful, velvety sauce and then layering it with the potatoes and cheese to ensure every bite is perfectly seasoned. It’s a simple process of prep, layer, and bake.

Step 1: Prep the Oven and Ingredients

Start by preheating your oven to 400°F (200°C) so it’s nice and hot when you’re ready to bake. While that’s heating up, take your 9×13 inch baking dish and grease it thoroughly with butter or cooking spray. This prevents sticking and makes cleanup a lot easier later on. Scrub your potatoes clean and slice them into thin, uniform rounds—aim for about 1/8-inch thickness so they cook evenly.

Step 2: Create the Flavor Base

In a large sauté pan or skillet, melt the butter over medium-high heat. Toss in your thinly sliced onions and sauté them for about 4 to 5 minutes until they are soft and translucent. Add the minced garlic and cook for just another minute or two until it’s fragrant—be careful not to burn it! Sprinkle the flour over the onion and garlic mixture, stirring constantly for a minute to cook out the raw flour taste.

Step 3: Simmer the Cream Sauce

Now, slowly pour in the chicken (or vegetable) stock while whisking continuously to prevent lumps. Follow this with the milk, salt, black pepper, and half of the fresh thyme. Keep whisking and let the sauce cook for another minute or two until it just starts to simmer around the edges and thickens slightly. You want a consistency that coats the back of a spoon. Remove it from the heat immediately so it doesn’t break.

Step 4: Layer the Potatoes

Arrange half of your sliced potatoes in an even layer across the bottom of your prepared baking dish. Pour half of your cream sauce over this bottom layer of potatoes—I usually try to scoop out most of the onions from the sauce to put in this middle layer. Sprinkle one cup of the cheddar cheese and all of the Parmesan cheese evenly over the top.

Step 5: Final Layer and Bake

Arrange the remaining potatoes on top of the cheese layer. Pour the rest of the cream sauce over the top, spreading it out to cover the potatoes as much as possible. Finish by sprinkling the remaining cup of cheddar cheese over everything. Cover the dish tightly with aluminum foil and bake for 30 minutes. Then, remove the foil and bake for another 25-30 minutes uncovered, until the cheese is golden brown and the potatoes are tender when pierced with a knife.

Step 6: Cool and Serve

Once the potatoes are done, pull them out of the oven and place the dish on a wire rack. Let them rest for at least 10 to 15 minutes. This resting period is crucial as it allows the sauce to set and thicken slightly, making it much easier to serve neat squares. Garnish with the remaining fresh thyme before bringing it to the table.

Additional Tips for Making this Recipe Better

After making this recipe a few times, I’ve discovered a few secrets that take it from good to great.

I highly recommend using a mandoline slicer if you have one. It ensures every single potato slice is exactly the same thickness, which means you won’t have some bites that are mushy and others that are undercooked.
I always grate my own cheese from a block. The pre-shredded stuff has a powdery coating that prevents it from melting into that gooey, stretchy consistency we all love.
Don’t skip the resting time! I know it’s tempting to dig in right away, but letting it sit for 15 minutes helps the sauce thicken up so the layers hold together when you scoop them out.

How to Serve Costco Scalloped Potatoes Recipe?

These scalloped potatoes are a showstopper side dish that pairs well with almost any main course. They are perfect alongside a holiday ham, roast chicken, or a juicy steak.

For a beautiful presentation, sprinkle some extra fresh thyme or chopped parsley on top right before serving to add a pop of green color.

If you want to get really fancy, a light dusting of paprika or even some crispy fried onions can add texture and visual appeal. Serve them warm directly from the baking dish for that cozy, family-style feel.

Nutritional Information

Here is a quick look at the nutritional breakdown per serving to help you plan your meal.

Calories: ~300-350 kcal
Protein: 10g
Carbohydrates: 35g
Fat: 18g

Make Ahead and Storage

This dish is actually very friendly for meal prep and leftovers, often tasting even better the next day.

You can bake this casserole completely, let it cool to room temperature, and then store it in the refrigerator tightly covered for up to 3 days. To reheat, cover with foil and bake at 350°F for about 30 minutes until warmed through.

These potatoes also freeze well. After baking and cooling, wrap the dish tightly in plastic wrap and then foil. Freeze for up to 2 months. Thaw overnight in the fridge before reheating in the oven.

Why You’ll Love This Recipe?

Here are a few reasons why this copycat Costco recipe will quickly become a staple in your home cooking rotation.

Pure Comfort Food: It hits all the right notes—creamy, cheesy, and carb-heavy—making it the ultimate comfort dish for chilly nights or family gatherings.
Crowd-Pleaser: I have yet to meet someone who doesn’t love cheesy potatoes. This dish scales easily and is perfect for feeding a large group at potlucks or holidays.
Better Than Store-Bought: While the Costco version is convenient, making it from scratch gives you fresh flavors and a texture that preservatives just can’t mimic.
Versatile Side: It goes with everything from fancy prime rib to simple grilled sausages, making it a versatile recipe to have in your back pocket.