Savory Peanut Butter and Caramelized Onion Grilled Cheese

Quick Recipe Version (TL;DR)

• Yield: 2 sandwiches (2 servings)
• Prep Time: 10 minutes
• Cook Time: 40 minutes
• Total Time: 50 minutes

Quick Ingredients

• 2 tbsp unsalted butter
• 1 tbsp olive oil
• 1 large yellow onion, thinly sliced
• 1/2 tsp kosher salt + black pepper
• 1 tsp light brown sugar
• 2 tsp balsamic vinegar
• 3 tbsp creamy peanut butter
• 4 slices sturdy sandwich bread (sourdough or country loaf)
• 4 oz sharp cheddar cheese, shredded (about 1 cup packed)
• 2–3 tbsp mayonnaise or softened butter (for the bread)
• 2 tbsp roasted salted peanuts, roughly chopped
• Optional: pinch red pepper flakes or hot honey

Do This

• 1. Slowly cook sliced onion in butter and olive oil with salt over medium-low heat (about 275–300°F / 135–150°C) for 25–30 minutes until deep golden and jammy. Stir often.
• 2. Stir in brown sugar and balsamic; cook 2–3 minutes more, then remove from heat.
• 3. Off the heat, stir peanut butter into the warm onions until smooth; thin with a splash of water if very thick.
• 4. Spread one side of each bread slice with mayonnaise or softened butter (this is the outer side). Flip the slices over.
• 5. On the unspread side, add a generous layer of onion–peanut mixture, then plenty of cheddar and a sprinkle of chopped peanuts. Top with remaining bread, mayo/butter side facing out.
• 6. Cook sandwiches in a nonstick or cast-iron skillet over medium-low heat (about 300–325°F / 150–165°C) for 3–4 minutes per side, until the bread is deeply golden and the cheese is fully melted. Rest 1–2 minutes, slice, and serve.

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Why You’ll Love This Recipe

• It turns a childhood favorite into a grown-up grilled cheese with layers of sweet, salty, and nutty flavor.
• Slow-cooked caramelized onions and creamy peanut butter meld into a surprisingly addicting spread.
• Shredded sharp cheddar melts into gooey pockets that contrast beautifully with crunchy roasted peanuts.
• Everything cooks in a single skillet, making this an easy yet impressive comfort-food dinner or lunch.

Grocery List

• Produce: 1 large yellow onion
• Dairy: Unsalted butter, sharp cheddar cheese, mayonnaise (or use non-dairy mayo if preferred)
• Pantry: Olive oil, hearty sandwich bread (sourdough/country loaf), creamy peanut butter, roasted salted peanuts, light brown sugar, balsamic vinegar, kosher salt, black pepper, optional red pepper flakes or hot honey

Full Ingredients

For the Caramelized Onion–Peanut Butter Spread

• 2 tbsp unsalted butter
• 1 tbsp olive oil
• 1 large yellow onion (about 10 oz / 280 g), halved and thinly sliced pole-to-pole
• 1/2 tsp kosher salt, plus more to taste
• 1/4 tsp freshly ground black pepper
• 1 tsp packed light brown sugar
• 2 tsp balsamic vinegar
• 3 tbsp creamy peanut butter (natural or conventional, well stirred)
• 1–2 tbsp water, as needed to loosen the mixture

For the Grilled Cheese Sandwiches

• 4 slices sturdy sourdough or country white bread, about 1/2-inch (1.25 cm) thick
• 2–3 tbsp mayonnaise or softened unsalted butter, for spreading on the outside of the bread
• 4 oz sharp cheddar cheese, coarsely shredded (about 1 cup packed)
• 2 tbsp roasted salted peanuts, roughly chopped
• Optional: pinch of crushed red pepper flakes or drizzle of hot honey for heat

Step-by-Step Instructions

Step 1: Slowly caramelize the onions

Set a large skillet (preferably cast iron or heavy stainless steel) over medium-low heat, about 275–300°F / 135–150°C if your stove has a temperature setting. Add the butter and olive oil. Once the butter has melted and is just starting to foam, add the sliced onion and sprinkle with the kosher salt and black pepper.

Stir to coat the onions evenly in the fat, then spread them out in an even layer. Cook, stirring every few minutes, until the onions soften and begin to turn translucent, about 10 minutes. Continue cooking, stirring frequently and adjusting the heat as needed so they slowly turn golden but do not burn. If the pan looks dry or browned bits begin to form, add 1–2 teaspoons of water at a time and scrape up the browned bits. This slow, gentle cooking should take 25–30 minutes total for deeply golden, jammy onions.

Step 2: Finish the onion jam and add peanut butter

When the onions are an even deep golden brown, sprinkle in the brown sugar and cook for 1–2 minutes, stirring, until the sugar melts and lightly glazes the onions. Add the balsamic vinegar and cook for another 1–2 minutes, scraping up any fond from the bottom of the pan until the vinegar reduces and coats the onions.

Turn off the heat and let the onions cool in the pan for 2–3 minutes so they are hot but not sizzling. Add the peanut butter directly to the skillet and stir thoroughly until it melts into the onions and forms a thick, glossy, savory-sweet spread. If the mixture seems very stiff, stir in 1–2 tablespoons of water, a little at a time, until it reaches a spreadable, jam-like consistency. Taste and adjust seasoning with a pinch more salt or a splash of balsamic if needed. Set aside.

Step 3: Prep the bread and cheese

While the onion-peanut mixture rests, prepare the bread and cheese. Lay out the 4 slices of bread on a cutting board. Spread one side of each slice with a thin, even layer of mayonnaise or softened butter; this will be the outside of the sandwich that hits the pan and gets crispy.

Flip all 4 slices so the unspread side is facing up. Evenly divide the shredded cheddar cheese into two generous piles. Roughly chop the roasted peanuts and keep them nearby, along with any optional red pepper flakes or hot honey you plan to use.

Step 4: Assemble the sandwiches

Spoon the warm onion–peanut butter mixture onto the unspread side of two slices of bread, dividing it evenly. Use the back of a spoon or an offset spatula to spread the mixture all the way to the edges, creating a thick, even layer.

Top each with half of the shredded cheddar, mounding it slightly in the center; it will melt and spread. Sprinkle 1 tablespoon of chopped peanuts over the cheese on each sandwich for crunch. If you like heat, add a pinch of crushed red pepper flakes on top of the cheese, or plan to drizzle hot honey after cooking. Place the remaining two slices of bread on top, mayo/butter side facing out, to complete the sandwiches.

Step 5: Griddle the first side until deeply golden

Place a clean skillet (you can reuse the onion pan if it is not scorched; wipe it out first) over medium-low heat, about 300–325°F / 150–165°C. Give the pan 2–3 minutes to preheat. Carefully place the sandwiches in the pan, making sure the mayo/butter-coated side is facing down.

Cook without moving the sandwiches for 3–4 minutes, or until the bottoms are deeply golden brown and crisp. If the bread is browning too quickly before the cheese starts to melt, reduce the heat slightly. For extra melt, you can cover the pan loosely with a lid during the last minute to trap heat, but be careful not to create too much steam, which can soften the bread.

Step 6: Flip, finish, and serve

Using a wide spatula, carefully flip each sandwich. Cook the second side for another 3–4 minutes, or until the bread is equally golden and the cheese is fully melted and starting to ooze at the edges. Adjust heat as needed so the bread crisps without burning.

When the sandwiches are done, transfer them to a cutting board and let them rest for 1–2 minutes. This brief rest helps the cheese thicken slightly so it does not all spill out when you slice. Cut each sandwich in half on the diagonal. If you like, finish with an extra pinch of chopped peanuts and a light drizzle of hot honey on top. Serve immediately while the cheese is still gooey and the bread is crisp.

Pro Tips

• Go low and slow with the onions. Truly caramelized onions take time. Rushing on high heat will brown the edges but leave the centers harsh and bitter. Medium-low heat and 25–30 minutes give the best sweet, jammy flavor.
• Shred your own cheddar. Pre-shredded cheese often has anti-caking agents that prevent smooth melting. Freshly shredded cheddar melts more evenly into stretchy, gooey layers.
• Use sturdy bread. A firm sourdough or country loaf holds up to the moist onion–peanut spread without becoming soggy. Very soft sandwich bread can collapse under all that filling.
• Mayo makes a crispier crust. Spreading mayonnaise on the outside of the bread gives an even, golden crust and is more forgiving than butter, which can burn faster.
• Dial in the balance. If the sandwich tastes too rich, add a squeeze of lemon or a tiny splash of vinegar; if it tastes too savory, a light drizzle of honey on top brightens and balances the flavors.

Variations

• Spicy lodge-style version: Add thinly sliced pickled jalapeños to the cheese layer, sprinkle extra red pepper flakes into the onion–peanut spread, and finish the warm sandwich with a drizzle of hot honey.
• Smoky campfire twist: Swap half the cheddar for smoked cheddar or smoked gouda, and add a pinch of smoked paprika to the onions when you stir in the brown sugar.
• Nut-free adaptation: For those avoiding peanuts, use sunflower seed butter in place of peanut butter and toasted pumpkin seeds instead of peanuts. The result will still be savory-sweet, rich, and crunchy.

Storage & Make-Ahead

The caramelized onion–peanut butter spread is perfect for making ahead. Let it cool completely, then transfer it to an airtight container and refrigerate for up to 4 days. Rewarm gently in a small skillet over low heat with a splash of water to loosen before assembling sandwiches.

Assembled but uncooked sandwiches can be covered and refrigerated for up to 4 hours; cook straight from the fridge over slightly lower heat so the cheese has time to melt. Fully cooked grilled cheeses are best enjoyed fresh, but leftovers can be wrapped tightly in foil and refrigerated for up to 1 day. Reheat in a skillet over medium-low heat or in a 350°F / 175°C oven for 8–10 minutes, flipping once, until the bread is re-crisped and the cheese is warm again. Microwaving will soften the bread, so use dry heat for the best texture.

Nutrition (per serving)

Approximate values per sandwich (1 serving), assuming mayonnaise is used and ingredients are divided evenly: about 950 calories; 38 g protein; 62 g total fat; 26 g saturated fat; 60 g carbohydrates; 7 g fiber; 14 g total sugars; 1,350 mg sodium. These numbers are estimates and will vary based on the exact bread, cheese, peanut butter, mayonnaise, and salt levels you use.