Southern Yellow Squash Casserole with Cheddar and Ritz Topping

The squash softens quickly in the skillet, but it can still leave a puddle at the bottom of the dish if you rush it. I learned to give the slices…

By Julia • November 1, 2026 • Reading time: 8 min

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The squash softens quickly in the skillet, but it can still leave a puddle at the bottom of the dish if you rush it. I learned to give the slices time to cook uncovered, then drain them before they meet the creamy filling. That extra attention keeps this Southern yellow squash casserole with cheddar and Ritz topping tender instead of loose and watery.

Finely chopped onion cooks right alongside the squash, so its savory sweetness gets into every bite. Sour cream and eggs bring the squash and sharp cheddar together, while buttery crackers add a crisp top. The finished casserole is creamy in the middle, with a golden, craggy layer that gives way under the spoon.

Why Yellow Squash Casserole Turns Watery Before It Reaches the Table

Yellow squash holds a lot of moisture, and a casserole has nowhere for that liquid to go once it’s covered by a creamy filling and cracker crumbs. If the squash goes straight from the skillet into the baking dish, some of that water can collect underneath and leave the center soupy. Cooking it uncovered gives steam a chance to escape before the casserole is assembled.

Draining the cooked squash is a second, separate safeguard—not a replacement for cooking off moisture in the skillet. Let it sit in a colander, then press gently; there’s no need to mash it or squeeze it completely dry. The goal is to remove loose liquid while keeping the squash pieces intact. This two-part approach lets the eggs set the filling and the sour cream stay creamy, rather than asking them to hold extra water in place.

What the Squash, Cheddar, and Ritz Each Bring to the Pan

• Yellow squash — Choose firm squash with smooth, unblemished skin. Cutting the slices evenly helps them soften at the same rate, so you don’t end up with a mix of firm centers and broken-down pieces.
• Yellow onion — Finely chopping it lets the onion soften alongside the squash and spread through the filling. Large pieces stay more noticeable and can compete with the delicate squash.
• Sour cream and eggs — Sour cream supplies the tangy, creamy base; eggs help the baked filling hold together. Plain Greek yogurt can replace the sour cream, though the casserole will taste tangier and the texture may be a little firmer.
• Sharp cheddar — Its fuller, savory taste stands up to the mild squash. Freshly shredded cheddar melts smoothly; pre-shredded cheese is convenient, but its coating can leave the filling a little less cohesive.
• Ritz crackers and butter — The crackers bring a salty, buttery crunch, and melted butter helps the crumbs brown instead of staying dry. If the crackers are stale, the topping won’t have the same crisp bite.

Build the Filling Before the Cracker Top Goes On

Cook the Squash Until Tender

Heat the oven to 350°F and grease a 2-quart baking dish. Warm the oil in a 12-inch skillet over medium heat, then add the squash, finely chopped onion, kosher salt, and black pepper. Cook uncovered for 12–15 minutes, stirring often, until the squash is very tender and excess moisture has cooked off. If the pieces are still firm in the middle, give them more time in the skillet rather than relying on the oven to soften them later.

Drain Off Loose Liquid

Transfer the cooked squash mixture to a colander and let it drain for 5 minutes. Gently press with the back of a spoon to release excess liquid, taking care not to crush the softened squash. A little moisture is fine; you’re looking to remove the liquid that would otherwise pool in the bottom of the casserole.

Stir Together the Creamy Base

Whisk the sour cream and eggs in a large bowl until blended, then stir in the shredded cheddar. Fold in the drained squash mixture so the cheese and creamy base reach the onion and squash throughout. Spread the filling evenly in the prepared baking dish; an even layer bakes more consistently than a mound in the center.

Top, Bake, and Let It Set

Crush the crackers into coarse crumbs and toss them with the melted butter. Scatter the topping evenly over the filling, without pressing it down. Bake for 35–40 minutes, until the topping is golden and the center reaches 160°F. Rest the casserole for 10 minutes before serving so the filling has time to settle and is easier to portion.

Two Easy Ways to Change the Cheddar-and-Cracker Top

Questions That Come Up When Making Squash Casserole

Southern Yellow Squash Casserole with Cheddar and Ritz Topping

Southern yellow squash casserole is baked with sharp cheddar and a buttery Ritz cracker topping. Tender squash and a creamy filling are finished with a golden, crisp crust.

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Prep Time 20 minutes mins

Cook Time 55 minutes mins

Resting time 10 minutes mins

Total Time 1 hour hr 25 minutes mins

Servings: 8 servings

Course: Side Dish

Cuisine: Southern

Calories: 305

Ingredients Equipment Method Notes

Ingredients

  

For the squash filling

• 2 lb yellow squash cut into 1/4-inch slices
• 1 yellow onion small, finely chopped
• 1 tbsp vegetable oil
• 0.5 tsp kosher salt
• 0.25 tsp black pepper
• 1 cup sour cream
• 2 eggs large
• 1.5 cup sharp cheddar cheese shredded

For the Ritz topping

• 1 sleeve (about 30) Ritz crackers
• 3 tbsp unsalted butter melted

Equipment

• 1 2-quart baking dish
• 1 12-inch skillet

Method

 

Prepare the filling

1. Heat the oven to 350°F.
2. Grease a 2-quart baking dish.
3. Heat the vegetable oil in a 12-inch skillet over medium heat.
4. Add the yellow squash, yellow onion, kosher salt, and black pepper, and cook uncovered, stirring often, for 12–15 minutes, until the squash is very tender and excess moisture has cooked off.
5. Transfer the squash mixture to a colander and let it drain for 5 minutes, gently pressing out excess liquid.
6. In a large bowl, whisk the sour cream and eggs.
7. Stir in the shredded sharp cheddar cheese and drained squash mixture.
8. Spread the filling in the prepared baking dish.

Make and bake the topping

1. Crush the Ritz crackers into coarse crumbs.
2. Toss the cracker crumbs with the melted unsalted butter.
3. Sprinkle the cracker mixture evenly over the filling.
4. Bake for 35–40 minutes, until the topping is golden and the center reaches 160°F.
5. Let the casserole rest for 10 minutes before serving.

Notes

For a casserole that is not watery, gently press excess liquid from the squash after draining. Refrigerate leftovers for 3–4 days; freezing is not recommended because it can affect the texture. For a gluten-free version, use gluten-free crackers.