Step 1: Activate the Yeast

In a large bowl or the bowl of a stand mixer, combine the warm milk, granulated sugar, and active dry yeast. Gently stir the mixture together. Let it sit undisturbed for 5-10 minutes. During this time, the yeast will feed on the sugar and begin to activate. You will know it’s ready when the mixture becomes frothy and bubbly on the surface, resembling the head of a beer. This process, called “proofing,” confirms that your yeast is alive and active. If you don’t see this foamy activity, your yeast may be old or the milk may have been too hot or too cold. It’s best to discard it and start over with fresh yeast.

Step 2: Form the Dough

Once the yeast is bubbly, add the melted and cooled butter and the room temperature egg to the bowl. Whisk them into the yeast mixture until well combined. Now, add the all-purpose flour and the salt. If using a stand mixer, fit it with the dough hook attachment. Mix on low speed until a shaggy, cohesive dough begins to form. If mixing by hand, use a wooden spoon or spatula to stir until you can no longer effectively mix, then use your hands to bring it together in the bowl.

Step 3: Knead the Dough to Perfection

Proper kneading is what develops the gluten strands in the flour, which gives the bread its structure and classic chewy, soft texture.

• Using a Stand Mixer: Increase the speed to medium-low and knead the dough for 7-8 minutes. The dough should transform from a sticky mass into a smooth, elastic ball. It should pull away cleanly from the sides of the bowl, though it might still stick a little to the bottom.
• Kneading by Hand: Lightly flour a clean work surface (a countertop or large cutting board works well). Turn the dough out onto the surface. It will be sticky at first, which is normal. Begin to knead by pushing the dough away from you with the heel of your hand, then folding it over on itself and giving it a quarter turn. Repeat this push-fold-turn motion for about 10-12 minutes. Resist the urge to add too much extra flour, as this can make the bread dense. The dough is perfectly kneaded when it is smooth, supple, and elastic. You can perform the “windowpane test” to check: take a small piece of dough and gently stretch it between your fingers. If you can stretch it thin enough to see light through it without it tearing, the gluten is well-developed and it’s ready.

Step 4: The First Rise (Bulk Fermentation)

Lightly grease a large, clean bowl with a little oil or cooking spray. Form your kneaded dough into a smooth ball and place it in the bowl, turning it over once to coat the top with oil. This prevents a dry skin from forming. Cover the bowl tightly with plastic wrap or a damp kitchen towel. Place the bowl in a warm, draft-free spot in your kitchen. A good option is inside an oven with the light on (but the heat off) or near a sunny window. Let the dough rise for 1 to 1.5 hours, or until it has visibly doubled in size.

Step 5: Shape the Loaf and Add the Cheese

Once the dough has doubled, gently press down on it to release the air. Transfer the dough to a lightly floured work surface. Using your hands or a rolling pin, gently shape the dough into a rectangle that is roughly 8 inches wide and 12-14 inches long. The short side should be about the length of your loaf pan. Sprinkle 1 ½ cups of the shredded cheddar cheese evenly over the surface of the rectangle, leaving a small ½-inch border along the edges. Starting from the short 8-inch side, roll the dough up into a tight log, just like you would for cinnamon rolls. Pinch the seam at the end firmly to seal it, and also pinch the ends to seal them. This tight roll and seal are crucial for creating a beautiful swirl and preventing the loaf from having large gaps inside after baking.

Step 6: The Second Rise (Proofing)

Grease a 9×5 inch loaf pan with butter or cooking spray. Carefully place the shaped log into the prepared pan, seam-side down. Cover the pan loosely with plastic wrap or a kitchen towel. Let it rise again in a warm place for another 45-60 minutes, or until the dough has risen about 1 inch above the rim of the pan. About 20 minutes before the second rise is complete, preheat your oven to 375°F (190°C).

Step 7: Bake to Golden Perfection

Once the loaf has finished its second rise, gently brush the top with a little melted butter or milk (this is optional but helps with browning). Sprinkle the remaining ½ cup of shredded cheddar cheese evenly over the top of the loaf. Place the loaf pan on the center rack of your preheated oven. Bake for 30-35 minutes. The bread is done when the top is a deep golden brown and the cheese is bubbly and melted. A great way to test for doneness is to gently tap the top of the loaf; it should sound hollow. For ultimate certainty, you can use an instant-read thermometer inserted into the center of the loaf—it should register 190-200°F (88-93°C).

Step 8: Cool Completely

This might be the hardest step, but it’s vital! Remove the loaf from the oven and let it cool in the pan for about 10 minutes. Then, carefully turn the loaf out of the pan and place it on a wire cooling rack. Let it cool completely for at least 1-2 hours before slicing. Slicing into hot bread can cause it to be gummy and can ruin the delicate internal structure you worked so hard to create. The cooling process allows the crumb to set properly.