Sweet and jammy caramelized onions make a beautiful pairing with quick-seared and savory mushrooms. They're the perfect topping for latkes, filling for omelets and swimming in the center of a grilled cheese sandwich. Caramelized Onions and Mushrooms are your new secret ingredient!

This perfect pairing presents endless culinary possibilities. Once you master the simple technique, you'll have a world of tasty options!
Ingredients needed to make this recipe:

Before we get to the step by step directions, a few notes about the ingredients:
Onions: regular yellow onions are a great option here, but sweet onions are a close second.
Mushrooms: baby Bella mushrooms are my preference, but regular bottom mushrooms will do the trick!
Fresh thyme: the classic herb for caramelized onions. Substitute diced chives at the end of cooking, if desired.
Full ingredient measurements included in the printable recipe card below.
Step by step process:
1. Prep and cook onions
Begin by peeling and slicing 3 yellow onions. I like to cut my onions in half, then lay the flat side down on the cutting board so all of my slices are half moons. I recommend about ⅛-1/4 inch thin slices - thin enough to cook through but not so thin as to risk burning or browning.
Melt two tablespoons of butter with one tablespoon of olive oil in a large sauté pan or cast iron skillet. Add the sliced onions to the pan and stir quickly to break up the onion rings and coat the thin strips in butter. Return to a low heat burner. Let the onions cook over that low heat, stirring from the bottom of the pan every few minutes.
Monitor the heat to ensure the onions are not sticking or browning, as they do when you're making sautéed onions. After 15 minutes, this is what they look like - slightly softened and yellowing. This is when I usually add a pinch of salt to the pan.
After 30 minutes, this is what they look like - the deeper caramelization is coming around the edges.
And here is the completed dish at the end of cooking - about 50 minutes over low heat completes the caramelization process. Transfer the sweet onions to a separate bowl and set aside.
2. Prep and cook mushroom
While the onions are caramelizing, clean and slice baby bella mushrooms. Use a damp paper towel or a cloth towel to clean the mushrooms. Do not rinse under water, or the wet mushrooms with their excess liquid will struggle to brown.
Heat oil (1 tablespoon of olive oil) over medium high heat. Add the sliced mushrooms to the large skillet in a single layer (to the extent possible).
Cook for about 3-4 minutes and do not disturb the shrooms. Leave them untouched. Mushrooms contain a lot of water. You'll see them release their water, steam briefly, then dry up and caramelize.
When the pan dries and the mushrooms are sizzling, toss the mushrooms to ensure they have taken on the caramelized brown color.
Remove from heat. Add a pinch of salt, a few cracks of black pepper and the fresh thyme leaves. Then add the caramelized onions back into the pan and toss.
3. Plate and serve
Taste and adjust seasoning. Plate, top with additional fresh herbs, and serve.
Looking for more delicious sides?
FAQ's and Serving Suggestions:
Time and heat level are the two factors driving the difference. Sautéed mushrooms and onions are usually cooked over medium heat to medium-high heat and you're looking for browning and crisping on the onions. Usually the mushrooms don't brown, because the liquid released from the onions are absorbed by the mushrooms, so they cook, but don't brown.
This is a versatile dish and almost any onion variety will work here - I've recommended yellow but white, sweet Vidalia or red will also be good options that offer great flavor.
This is one of my favorite recipes to make almost weekly, so I've made it often enough to know that baby bellas are the best mushrooms for the mix. But white mushrooms are perfectly acceptable, and I've even used a mix of wild mushrooms which added a real depth of flavor to the dish.
Of course! I'm a huge fan of mushrooms, onions and thyme (hello, French onion soup!) so that's my preference. But diced fresh chives or fresh parsley would add a nice, fresh hit of herby flavor, as would rosemary. If I'm out of fresh herbs, I have added a pinch of dried poultry seasoning and it has been delicious.
You certainly could do that but the mushrooms won't achieve that brown caramelization. This method will achieve that sweet, jammy onion AND the crispy-edged mushroom, which takes the dish to a whole new level of flavor. This is a simple recipe with just a few ingredients, I like to treat each one really well to coax the most flavor out of them.
It's an easy dish that brings so much flavor, so the pairing options are practically endless. A few of my favorites include:
- topping mashed potato latkes along with sour cream dill sauce
- vegetarian option for omelet filling
- gourmet ingredient for grilled cheese sandwiches
- easy side dish for grilled fish and rice
- healthy addition to grain bowls
- easy add-in for quiche
- versatile side dish for any protein (pescatarian, or not!)
Because the onions take a good bit longer to caramelize than mushrooms, cook the onions before the shrooms for the perfect texture.
Caramelized Onions and Mushrooms
- Total Time: 1 hour 5 minutes
- Yield: 4 1x
Description
Rich and earthy, these caramelized onions and mushrooms are the perfect side dish, potato latke topping or grain bowl super star.
Ingredients
3 yellow onions
2 tablespoons butter
2 tablespoon olive oil, divided
8 ounces baby bella mushrooms
½ teaspoon fresh thyme leaves
Coarse sea salt and black pepper
Instructions
- Cook onions in 2 tablespoons butter and ½ tablespoon olive oil over medium low to low heat for 45-55 minutes, stirring every 5-6 minutes to ensure the onions are not browning or sticking to the pan. Remove onions from the pan and wipe out.
- Add 1 ½ tablespoons olive oil to the same pan over medium high heat. Once sizzling, add sliced mushrooms in single layer. Leave untouched for 3-4 minutes, until a golden brown crust has developed. Toss with salt, pepper and thyme. Taste and adjust seasoning. Remove from heat and mix with caramelized onions.
- Serve with additional fresh thyme, if using.
Notes
Do not rinse mushrooms under water, or the wet mushrooms with their excess liquid will struggle to brown.
- Prep Time: 5
- Cook Time: 60
- Category: Side, Appetizer
- Method: Stovetop
- Cuisine: American, French
[…] dish. And the topping varieties are endless, including sour cream dill sauce with smoked salmon, caramelized onions and mushrooms, quail eggs and even cranberry […]