Place potatoes into a large pot and cover with salted water; bring to a boil. Reduce the heat to medium-low and simmer until tender, about 10 minutes. Drain.

While potatoes are cooking, melt butter in a small skillet over medium heat. Add onion and sauté until golden brown. Set aside.

Preheat the oven to 350 degrees F (175 degrees C).

Mash potatoes with condensed soup and sour cream until smooth and creamy. Mix in onions, 3/4 cup Cheddar cheese, salt, and pepper. Spoon into a 2-quart casserole dish.

Bake in the preheated oven for 30 minutes. Sprinkle remaining 1/4 cup Cheddar over top and bake for 10 more minutes. Serve hot.