Add bacon to a Dutch oven or large pot. Set heat to medium high and sear bacon on both sides until they reach desired crispiness. Remove bacon. Chop bacon into small pieces and set aside. If you prefer not to use all the grease, feel free to remove 1-2 tbsp.
Add flour to the bacon grease. Stir to combine. Immediately after that, add milk and chicken broth. Stir and bring to a boil.
Add potatoes to pot. Stir to combine. Bring to a boil, then cook for 10 minutes or until potatoes are soft.
Using a potato masher or immersion blender, mash potatoes in soup briefly until they are in small chunks. They do not have to be finely mashed.
Add cheddar cheese, sour cream and bacon. Optional: reserve a few pieces of bacon as garnish. Stir soup to combine. Add salt and pepper to taste to open up the flavors.
Boil for a few more minutes then remove from heat.
Garnish with cheddar cheese, chives and bacon pieces (optional). Serve and enjoy!
Notes
I always strive to always improve my recipes! Upon retesting, this recipe was updated on September 23, 2026, and the following changes were made:
Bacon is cooked on the stovetop in the Dutch oven, Bacon grease formed is used to cook the soup, while butter was omitted.
Whole milk is used instead of 2% milk for a creamier texture.