Outback Steakhouse Potato Soup is a creamy, comforting bowl full of tender potatoes, crispy bacon bits, and plenty of cheese and green onions. It’s the kind of soup that feels like a warm hug on a chilly day, packed with rich flavors that stick to your ribs.
I love making this soup when I want something simple to please everyone at the table. The crispy bacon sprinkled on top adds just the right amount of crunch, and the cheddar cheese melts perfectly into the velvety broth. I usually like to add a little extra cheese and some sour cream for that perfect creamy finish.
When I serve this soup, I like to pair it with a crusty bread roll for soaking up every last drop. It’s a recipe that always brings smiles and makes the whole meal feel special, without a lot of fuss. If you haven’t tried it yet, Outback Steakhouse Potato Soup is definitely worth making at home for a cozy, satisfying treat.
Key Ingredients & Substitutions
Potatoes: Russet potatoes work best for this soup because they break down nicely to create a creamy texture. If you can’t find russets, Yukon Gold are a good substitute with a buttery flavor.
Chicken Broth: Use low-sodium broth to control the saltiness. For a vegetarian option, replace with vegetable broth.
Cheddar Cheese: Sharp cheddar adds a nice tangy flavor. Mild cheddar works too if you prefer less sharpness. You can also mix in Monterey Jack for extra creaminess.
Bacon: Bacon adds smokiness and crunch. For a vegetarian alternative, try smoked paprika or cooked mushrooms for depth.
Heavy Cream and Milk: The combo makes the soup creamy and smooth. Use half-and-half to reduce fat, or coconut milk for a dairy-free twist, but expect a slight change in flavor.
How Do I Get the Perfect Creamy Texture Without Lumps?
The key to creamy potato soup is partially mashing the potatoes while still leaving some chunks for texture. Here’s how I do it:
- When potatoes are tender, use a potato masher or immersion blender to mash some, but not all, of the potatoes.
- Don’t over-blend, or the soup can get gluey from released starch.
- Stir in cream and milk slowly, warming without boiling to avoid curdling.
- Adding the cheese off heat or on very low heat helps it melt smooth without clumping.
Taking these steps helps to achieve that rich, velvety soup that’s both thick and comforting with soft potato bites throughout.

Equipment You’ll Need
- Large pot – I like it because it gives plenty of room to cook and mash the potatoes easily.
- Wooden spoon or spatula – useful for stirring and mashing without scratching the pot.
- Immersion blender or regular blender – makes blending part of the soup quick and smooth, but you can also mash with a potato masher for a chunkier texture.
- Measuring cups and spoons – for accuracy and consistency.
- Peeler (optional) – if you prefer to peel potatoes before cooking.
Flavor Variations & Add-Ins
- Swap bacon for cooked sausage or ham for a different smoky flavor or added protein.
- Mix in sautéed mushrooms or bell peppers for extra vegetables and texture.
- Add a dash of hot sauce or cayenne pepper if you like a spicy kick.
- Use a different cheese like Monterey Jack or Pepper Jack for variation in flavor and heat.
Outback Steakhouse Potato Soup
Ingredients You’ll Need:
- 4 cups diced potatoes (about 3 medium potatoes)
- ½ cup chopped onions
- 4 cups chicken broth
- 1 cup heavy cream
- 1 cup milk
- ¼ cup all-purpose flour
- 4 tablespoons butter
- 8 oz shredded sharp cheddar cheese
- 8 slices cooked bacon, crumbled (plus extra for garnish)
- 2 tablespoons chopped fresh chives (plus extra for garnish)
- Salt and pepper to taste
How Much Time Will You Need?
This soup takes about 10 minutes of prep time and around 25 minutes of cooking. So, you can have a warm, creamy bowl of potato soup ready in about 35 minutes total. Perfect for a cozy lunch or dinner!
Step-by-Step Instructions:
1. Cook the Onions and Make the Roux:
In a large pot, melt the butter over medium heat. Add the chopped onions and cook for 3 to 4 minutes until they become soft and translucent. Then, sprinkle the flour over the onions and butter. Stir constantly for about 2 minutes to form a roux — this will help thicken your soup nicely.
2. Add Broth and Potatoes:
Slowly whisk in the chicken broth, stirring well to avoid lumps. Bring this mixture to a gentle simmer. After that, add the diced potatoes. Let them cook until tender, which usually takes about 12 to 15 minutes.
3. Blend and Add Cream:
Once the potatoes are soft, use a potato masher or an immersion blender to mash some of the potatoes, leaving some chunks for texture. Next, stir in the heavy cream and milk, warming the soup gently without letting it boil.
4. Finish with Cheese, Bacon, and Seasoning:
Add the shredded cheddar cheese and crumbled bacon into the soup, stirring until the cheese melts and the soup becomes smooth. Season with salt and pepper to your liking.
5. Serve and Garnish:
Ladle the hot soup into bowls and sprinkle extra cheddar cheese, bacon bits, and chopped fresh chives on top. Enjoy your warm, comforting homemade Outback Steakhouse Potato Soup!
Can I Use Frozen Potatoes for This Soup?
Yes, you can use frozen diced potatoes to save prep time. Just make sure to thaw them completely before cooking to prevent excess water in the soup, which can thin the texture.
How Do I Store Leftover Potato Soup?
Store leftovers in an airtight container in the refrigerator for up to 3 days. Reheat gently on the stove over low heat, stirring occasionally to keep the soup creamy and avoid scorching.
Can I Make This Soup Dairy-Free?
Absolutely! Substitute the heavy cream and milk with coconut milk or any plant-based milk. Keep in mind this will add a slightly different flavor, but your soup will still be delicious and creamy.
Is There a Way to Thicken the Soup More?
If you prefer a thicker soup, mash more of the potatoes or stir in a slurry made from 1 tablespoon flour mixed with 2 tablespoons cold water, then cook for a few extra minutes until thickened.



