Gather all ingredients.

Preheat the oven to 350 degrees F (175 degrees C) and lightly grease a 2-quart baking dish.

Cook sliced potatoes in a large saucepan of lightly salted, boiling water for 5 minutes. Drain.

Cook sausage in a 10-inch skillet over medium heat until no longer pink, breaking it into crumbles. Add onion and peppers; cook about 3 minutes more or until just beginning to soften. Drain sausage mixture and set aside.

Whisk together soup and milk in a medium bowl. Stir in 3/4 cup of the cheese and black pepper.

Layer half the potatoes, soup mixture, and sausage mixture in the prepared dish. Repeat layers.

Cover and bake until potatoes are tender, 45 to 50 minutes.

Sprinkle with remaining 1 1/4 cups cheese. Bake, uncovered, until cheese is melted, 10 minutes.