Set your oven to 350°F. Lightly grease a baking dish with cooking spray or butter. This helps prevent sticking and makes cleanup much easier after baking.

Melt butter in a large skillet over medium heat. Add the sliced squash and chopped onion. Cook until tender, stirring occasionally for even cooking.

Transfer the cooked vegetables into a colander. Allow excess liquid to drain completely. Removing extra moisture helps prevent a watery casserole after baking.

Allow the squash mixture to cool for several minutes. This prevents the egg from cooking too quickly when mixed with the other ingredients.

Place squash and onion in a large bowl. Add cheddar cheese, sour cream, egg, salt, and pepper. Stir gently until everything is fully combined.

Spoon the mixture into the prepared baking dish. Spread it evenly with the back of a spoon to ensure even baking throughout.

Combine crushed crackers and melted butter in a small bowl. Mix until the crumbs are evenly coated and have a rich buttery texture.

Sprinkle the cracker mixture evenly over the casserole. Make sure the entire surface is covered for a crispy golden crust.

Place the dish in the oven and bake for 30 to 35 minutes. The top should be golden brown and the filling should be bubbling.

Remove the casserole from the oven. Let it rest for five minutes before serving. This helps the filling set and improves texture