STEP 1: Pre-Heat Oven.  Preheat the oven to 350 degrees Fahrenheit (177 degrees Celsius).

STEP 2: Prepare the Baking Dish.  Start by taking an 8×8 inch baking dish and generously buttering the bottom and sides.  Cut or tear the bread into medium chunks.  Arrange bread to completely cover the bottom of the dish.

STEP 3: Saute the Mushrooms.  Heat a small frying pan over medium heat and melt butter.  Add sliced mushrooms to the pan and sauté them until they are nicely browned, which should take about 7 – 9 minutes.  This step infuses the mushrooms with a rich, buttery flavor, adding depth to the casserole.

STEP 4: Add Water Chestnuts and Mayonnaise.   Once the mushrooms are sautéed, remove the pan from the heat.  Stir in chopped water chestnuts and mayonnaise, mixing everything together until well combined. 

STEP 5:  Create First Layer.  This mixture should then be evenly spread over the layer of bread in the baking dish.  Follow this by sprinkling a generous amount of grated cheese over the top, covering the mushroom mixture.

STEP 6: Prepare the Casserole Mixture.  In a large mixing bowl, combine milk, cream of celery soup, beaten eggs, diced pimento, salt, and white pepper.  Whisk these ingredients together until the mixture is smooth and well blended.  This creamy mixture is then poured over the mushroom layers, ensuring the dish is well-coated and ready for baking.  NOTE:  Preparing your casserole ahead of time and refrigerating it overnight is a fantastic little kitchen hack. It not only helps you manage your time more effectively, especially if you’ve got a busy day ahead, but it also allows all those delicious flavors to meld together, promising an even tastier dish once it’s finally time to bake.

STEP 7: Bake the Casserole.  Bake the casserole for 1 hour at a temperature that ensures the dish is cooked through and a toothpick inserted into the center comes out clean.