This creamy Outback Potato Soup is a warm hug in a bowl! Made with fluffy potatoes, crispy bacon, and a sprinkle of cheese, it’s super comforting and delicious.
Whenever I make this soup, my kitchen smells so good that I can barely wait to eat it! The best part? It’s a one-pot wonder, making cleanup a breeze!
Key Ingredients & Substitutions
Potatoes: I recommend using Russet potatoes for their starchy texture, which helps thicken the soup. If you want a healthier twist, sweet potatoes can be a tasty alternative!
Bacon: Classic for flavor, but if you’re looking for a healthier option, turkey bacon or even vegetarian bacon can still give a lovely smoky taste without the extra fat.
Cheddar Cheese: Sharp cheddar adds wonderful flavor. If you want to mix it up, try adding a bit of smoked gouda or pepper jack for some heat. Vegan cheese is a great substitute if you want to keep it plant-based!
Chicken Broth: For a vegetarian version, vegetable broth works well. You can even use homemade broth for an extra boost of flavor.
How Do You Get the Perfect Creamy Texture?
The key to a creamy potato soup lies in how you incorporate the roux. Making a roux is simple: melt butter, then whisk in flour and cook for a couple of minutes. This helps avoid lumps when you add the milk.
- After melting the butter, keep whisking as you slowly add milk until smooth and thick. This step is crucial!
- When mashing potatoes, leave some chunks for texture – that rustic feel is what makes potato soup special!
- Always add the milk mixture slowly to the soup, stirring well to blend.
With these tips, your potato soup will be comforting and delicious every time! Enjoy it with some crusty bread for dipping!

How to Make Outback Potato Soup
Ingredients You’ll Need:
For the Soup:
- 4 large baking potatoes, peeled and cubed
- 6 slices bacon
- 1 medium onion, finely chopped
- 3 cups chicken broth
- 1 cup water
- 1 cup shredded cheddar cheese (plus extra for garnish)
- 2 cups milk
- 3 tablespoons butter
- 3 tablespoons all-purpose flour
- Salt and pepper to taste
- 1/2 teaspoon dried thyme (optional)
- Fresh parsley, chopped (for garnish)
How Much Time Will You Need?
This hearty potato soup takes about 15 minutes of prep time and around 30-40 minutes to cook. In just under an hour, you’ll have a delicious, warm bowl of comfort ready to enjoy!
Step-by-Step Instructions:
1. Cook the Bacon:
Start by cooking the bacon in a large pot over medium heat until it’s nice and crispy. This should take about 5-7 minutes. Once cooked, remove the bacon from the pot and crumble it up into pieces. Set it aside for later. Don’t drain the bacon grease—keep about 2 tablespoons in the pot to add flavor!
2. Sauté the Onion:
In the same pot with the bacon grease, toss in the finely chopped onion. Sauté for about 5 minutes, or until the onion is soft and translucent. This adds a great depth of flavor to your soup!
3. Add the Potatoes:
Now, add the cubed potatoes, chicken broth, and water to the pot. Bring everything to a boil, then reduce the heat and let it simmer for approximately 15-20 minutes until the potatoes are tender. You want them just soft enough to mash a bit for texture!
4. Make the Roux:
While the potatoes are cooking, grab a separate saucepan and melt the butter over medium heat. Once melted, add in the flour, stirring continuously for about 2 minutes. This is called making a roux, which will help thicken your soup!
5. Add Milk to the Roux:
Slowly pour the milk into the roux, whisking all the while to prevent any lumps. Keep stirring until the mixture thickens and is smooth. Once ready, remove it from the heat and set it aside.
6. Mash the Potatoes:
When the potatoes are tender, take a potato masher and gently mash some of the potatoes in the soup. This helps create a creamy texture while still leaving some chunks for character!
7. Mix Everything Together:
Now slowly stir the milk and roux mixture into your potato soup, mixing well. Then, add the shredded cheddar cheese, stirring until it’s beautifully melted and combined.
8. Season and Heat:
Season your soup with salt, pepper, and dried thyme if you’re using it. Gently heat everything through without boiling it—just let it warm and blend those flavors!
9. Serve and Enjoy:
Once everything is hot and delicious, ladle the soup into bowls. Top with crumbled bacon, extra cheese, and a sprinkle of fresh parsley for a lovely finish. Dive in and enjoy your rich, creamy Outback Potato Soup!
This delightful soup is perfect for cozy dinners or gatherings with friends and family. Enjoy every warm spoonful!

Can I Use Frozen Potatoes in This Recipe?
While fresh potatoes are preferred for the best texture and flavor, you can use frozen diced potatoes. Just be sure to thaw them before adding to the soup to ensure even cooking and prevent excess water from affecting the soup’s consistency.
What Can I Substitute for Bacon?
If you want to make this soup vegetarian or reduce the fat, consider using turkey bacon, smoked sausage, or omitting the meat entirely. You could also use liquid smoke or a bit of smoked paprika to maintain that smoky flavor without the bacon.
How Should I Store Leftover Soup?
Store any leftovers in an airtight container in the fridge for up to 3 days. When reheating, add a splash of milk to bring back the creamy texture and warm it gently on the stove or in the microwave.
Can I Make This Soup Dairy-Free?
Yes! To make this soup dairy-free, substitute the milk with almond milk, coconut milk, or any non-dairy milk of your choice. Use dairy-free cheese for the cheddar to keep the flavors intact!