Grease a 1½ or 2 qt. casserole dish with butter.

Peel potatoes and cut into ¼-inch slices. Layer half of the potatoes in the bottom of the casserole dish.  Season with salt and pepper. Slice onion and place on top, then add the remaining potatoes.

Preheat oven to 400°F.

Melt butter in a medium saucepan over medium heat. Combine flour and salt, and add to the butter, stirring with a whisk for about a minute (the mixture will be very thick). Slowly add milk while continuing to stir mixture (Do not rush this as the milk will burn). When mixture has thickened, add cheese. Stir until melted.

Pour cheese mixture over potatoes, and cover with lid or aluminum foil.

Bake for about 1½ hours or until potatoes are tender.