Outback Potato Soup is a creamy, hearty bowl full of tender potatoes, crispy bacon bits, melted cheese, and a touch of green onion for a little fresh crunch. It’s a comforting dish that feels like a warm hug on a chilly day, perfect for when you want something simple yet filling.
I love making this soup when I want something easy to prepare that still feels special. The way the potatoes soften just right and the cheese melts into the broth is so satisfying. Plus, adding the bacon at the end gives it that irresistible smoky flavor that everyone always asks for more of.
My favorite way to enjoy Outback Potato Soup is with a side of warm, crusty bread or even some buttery crackers. It’s perfect for a cozy night at home, and I always find it’s a crowd-pleaser whether I’m sharing it with family or friends. This soup is definitely one I come back to whenever I need a little extra comfort on the menu.
Key Ingredients & Substitutions
Bacon: Bacon adds smoky, crispy goodness to the soup. If you want a vegetarian version, try smoked paprika or smoked salt instead for that smoky flavor without meat.
Potatoes: Russet potatoes are great for their fluffy texture when cooked, but Yukon Golds work well too and hold their shape better for a chunkier soup.
Cheese: Sharp cheddar gives the soup its rich, tangy flavor. You can swap for Colby Jack or even mozzarella if you want a milder taste and gooey texture.
Flour & Milk: The flour and milk make the soup creamy and help it thicken. For a dairy-free option, use a gluten-free flour and coconut or almond milk—just expect a slight flavor change.
How Do You Get the Soup Nice and Creamy Without Lumps?
Adding flour to the milk creates a thickening base, but it needs care to avoid lumps:
- Whisk the flour into the cold milk before adding to the soup—this helps mix it evenly.
- Add the milk mixture slowly to the hot soup while stirring constantly. This stops clumps from forming.
- Keep stirring as the soup simmers gently, allowing it to thicken smoothly.
- If lumps happen, a simple fix is to use an immersion blender for a few seconds until smooth.
Patience here really pays off with a silky, creamy texture that feels just right.

Equipment You’ll Need
- Large heavy-bottomed pot – I prefer this because it heats evenly and prevents hot spots that can scorch the soup.
- Slotted spoon – great for removing the crispy bacon bits without greasy drips.
- Whisk – essential for mixing the flour and milk smoothly into the soup to avoid lumps.
- Measuring cups and spoons – for accurate ingredient portions and seasonings.
- Cutting board and knife – for chopping potatoes, onions, and herbs easily.
Flavor Variations & Add-Ins
- Use cooked chicken or turkey instead of bacon for a leaner version that still feels hearty.
- Add cooked corn or diced bell peppers for extra color and sweetness.
- Stir in a dash of hot sauce or cayenne pepper for a spicy kick.
- Mix in a splash of cream or sour cream at the end for an extra creamy finish.

Outback Potato Soup
Ingredients You’ll Need:
- 6 slices bacon, diced
- 5 cups peeled and diced potatoes (Russet or Yukon Gold)
- 1 cup diced onion
- 3 cups chicken broth
- 1 cup water
- 1/2 cup celery, chopped
- 1/4 cup all-purpose flour
- 3 cups milk (whole milk preferred)
- 1 cup shredded sharp cheddar cheese
- Salt and black pepper to taste
- 1/2 tsp garlic powder
- 1/4 tsp dried thyme
- 2-3 green onions, sliced (optional)
- Fresh parsley, chopped (for garnish)
Time Needed
This recipe takes about 10 minutes for prep and around 30 minutes for cooking, making it ready in about 40 minutes total. It’s a straightforward recipe that fills your kitchen with wonderful smells and ends with a cozy, creamy soup.
Step-by-Step Instructions:
1. Cook the Bacon:
Heat a large pot over medium heat. Add the diced bacon and cook until it’s crispy and golden. Use a slotted spoon to remove the bacon and place it on paper towels to drain. Leave 2 tablespoons of the bacon fat in the pot — that will give your soup lots of flavor!
2. Sauté the Vegetables:
Add the diced onion and chopped celery to the bacon fat in the pot. Cook over medium heat, stirring often, until the vegetables are soft and translucent—about 5 minutes.
3. Cook the Potatoes:
Stir in the diced potatoes, chicken broth, and water. Bring to a boil, then reduce the heat to a simmer. Cook until the potatoes are tender and soft, about 15 to 20 minutes.
4. Make It Creamy:
In a bowl, whisk together the flour and milk until smooth. Slowly pour this mixture into the pot, stirring constantly so no lumps form. Keep stirring as the soup cooks for another 5 to 7 minutes until the soup thickens slightly.
5. Add Flavor and Cheese:
Mix in the shredded cheddar cheese, garlic powder, dried thyme, salt, and black pepper. Stir until the cheese has melted and everything is well blended.
6. Finish and Serve:
Stir half of the cooked bacon back into the soup, and save the rest for topping. Serve the soup hot, garnished with the reserved bacon, fresh parsley, and sliced green onions if you like a little extra color and flavor.
This rich and comforting soup pairs wonderfully with crusty bread or your favorite crackers. Enjoy!
Can I Use Frozen Potatoes for This Soup?
Yes, you can use frozen diced potatoes for convenience! Just thaw them completely and drain any excess moisture before adding to the soup to avoid watery broth.
How Can I Make This Soup Vegetarian?
Skip the bacon and use vegetable broth instead of chicken broth. Add smoked paprika or liquid smoke to give it that smoky flavor without meat.
Can I Make This Soup Ahead of Time?
Absolutely! Prepare the soup up to two days in advance and refrigerate in an airtight container. Reheat gently on the stove, stirring occasionally, and add a splash of milk if it needs thinning out.
What Can I Use Instead of All-Purpose Flour?
You can substitute cornstarch or a gluten-free flour blend to thicken the soup. Mix it with cold milk before adding to the pot to keep the texture smooth.