In a small bowl combine warm water (about 105–115°F / 40–46°C), 1 tsp sugar and 2 tsp active dry yeast. Stir gently and let sit 5–10 minutes until foamy.

Mix wet ingredients

In a large mixing bowl whisk together warm milk, melted butter (3 tbs) and 1 beaten egg.

Form dough

Add foamy yeast mixture to the wet ingredients. Gradually add 3 cups all-purpose flour and 1 tsp salt, mixing with a wooden spoon or dough hook until a shaggy dough forms.

Knead dough

Turn dough onto a lightly floured surface and knead 6–8 minutes until smooth and elastic (or knead in a stand mixer with dough hook on medium for 4–5 minutes). Add small additional flour (1–2 tbsp) only if dough is excessively sticky.

First rise

Place dough in a lightly oiled bowl, cover with plastic wrap or a clean kitchen towel, and let rise in a warm draft-free place until doubled, about 60–75 minutes.

Filling

Make garlic butter

While dough rises, prepare the filling. In a small bowl combine 4 tbs softened butter, minced garlic, 2 tbs finely chopped parsley, 1/2 tsp salt and 1/4 tsp black pepper. Mix until smooth and evenly distributed.

Prepare ham and cheese

Shred 2 cups cheddar and 1 cup mozzarella and set aside. Lay out 8 slices deli ham and tear or fold to approximate the width of your dough later.

Assemble & Bake

Roll out dough

After the dough has doubled, punch it down and turn onto a lightly floured surface. Roll into a rectangle roughly 12 x 16 inches (30 x 40 cm) and about 1/4 inch thick.

Spread garlic butter

Evenly spread the prepared garlic butter over the dough leaving a 1/2-inch border on one long edge.

Layer ham and cheese

Arrange the ham slices in an even layer over the butter, slightly overlapping. Sprinkle the shredded cheddar and mozzarella evenly over the ham.

Roll and shape

Starting from the long edge opposite the 1/2-inch border, tightly roll the dough into a log. Pinch the seam and the ends to seal. Place seam-side down and gently shape into a loaf to fit a greased 9 x 5-inch loaf pan. Alternatively, form into a freeform oval on a parchment-lined baking sheet.

Second rise

Cover the shaped loaf loosely with plastic wrap or a towel and let rise for 30–40 minutes until puffy.

Egg wash

Preheat oven to 375°F (190°C). Beat 1 egg with 1 tbs milk to make an egg wash. Brush the top of the risen loaf with the egg wash.

Bake

Bake in the preheated oven for 25–30 minutes (30–35 minutes if in a loaf pan) until the crust is golden brown and internal temperature is about 190°F (88°C). If the top is browning too quickly, tent loosely with foil after 20 minutes.

Finish

Remove from oven and immediately brush the top with 2 tbs melted butter and sprinkle 1/2 tsp garlic powder (optional) and the extra chopped parsley. Let the bread rest in the pan for 10 minutes, then transfer to a wire rack to cool 10–15 minutes before slicing so cheeses set slightly.