Gather all ingredients.

Place bacon in a large skillet and cook over medium-high heat, turning occasionally, until evenly browned, about 8 to 10 minutes. Drain bacon slices on paper towels; crumble and set aside.

Meanwhile, melt butter in a stockpot or Dutch oven over medium heat. Gradually add flour, whisking until well-combined. Slowly pour in milk, whisking constantly until smooth and thickened.

Add potatoes and onions and bring to a boil, stirring frequently. Reduce heat and simmer for 10 minutes.

Stir in crumbled bacon, Cheddar cheese, sour cream, salt, and pepper. Continue cooking and stirring until cheese is melted.

Enjoy!