Preheat oven to 350°F. Grease a 9×13 baking dish with nonstick cooking spray.: As the oven warms, you will smell the faint electrical hum and warmth seeping into the kitchen, which primes the bake for even cooking. Preparing the dish with nonstick spray prevents the bottom from sticking, ensuring clean slices when you serve. The even heat at 350°F encourages gentle setting of the custard while allowing the top to lightly brown. A common mistake is skipping greasing, which can make serving messy and cause portions to tear, so take the minute to spray thoroughly.
Cut Italian bread into 1-inch cubes. Place half in the baking dish.: When you cut the Italian bread , you’ll notice the tender crumb and slight chew that makes it ideal. The cubes should be roughly uniform so they soak custard at the same rate, creating an even texture. Placing half first forms a stable base layer that will absorb the initial custard and hold the cream cheese pockets. If cubes are different sizes, some will over soak and become mushy, so aim for consistency.
In a bowl, beat cream cheese, powdered sugar, and 1/4 cup milk until smooth. Spoon dollops (or spread) over the bread.: As you beat the cream cheese with powdered sugar and a touch of milk , it becomes glossy and silky, almost like a soft frosting. Dolloping creates little islands of creamy tang that melt into the bake while baking. If you overwork it, the mixture can become too soft and blend completely into the custard, so beat just until smooth and still slightly structured. Lumps indicate the cheese was too cold, so warm it slightly and try again.
Sprinkle with chopped strawberries and top with the remaining bread cubes.: Adding the chopped strawberries here gives bursts of fresh fruit within the center layers, which will release gentle juices as they bake and become tender. The remaining bread on top forms a cap that will soak some custard but also create a contrasting texture. Distribute the fruit evenly to avoid a single wet spot, and don’t heap all berries in one corner or the bake will become too moist there.
In a separate bowl, whisk eggs, 2 cups milk, sugar, vanilla, and cinnamon until well blended. Pour evenly over the bread, covering as much as possible. Gently press bread into the mixture if needed.: As you whisk, the eggs and milk turn into a pale, fragrant custard flecked with cinnamon and warmed by vanilla . Pouring evenly ensures each cube is moistened, while gentle pressing helps the custard sink in without collapsing the structure. The sound is silent here, but you may hear liquid settling between the cubes. Avoid overpressing which can produce overly compacted slices that lack airiness.
Cover with foil and bake for 30 minutes. Remove foil and continue baking 20–25 minutes, until the center is set and the casserole is heated through. Let stand a few minutes before serving.: Under the foil the bake steams slightly, which helps the custard set without drying the top. When you remove the foil, the top will begin to tan and emit a rich, baked aroma. The center should feel set and slightly springy when gently touched, not liquid. Overbaking can dry the custard and make it rubbery, while underbaking leaves it jiggly; aim for a gentle set. Allowing it to rest after baking helps residual heat finish the setting process and makes slicing neater.
While the casserole bakes, make the strawberry sauce. In a saucepan, combine water, sugar, and cornstarch. Cook over medium-high heat until boiling. Boil for 3–4 minutes.: As the sauce heats, the sugar dissolves and the mixture will begin to thicken and take on a glossy sheen. The bubbling sound will intensify as it reaches a boil, and the aroma shifts to a cooked fruit sweetness. Boiling allows the cornstarch to fully activate and remove any raw starch flavor; stop when the mixture becomes translucent and thick enough to coat a spoon. A common mistake is simmering too low or stirring insufficiently, which can leave lumps of starch.
Stir in chopped strawberries, reduce heat to medium-low, and cook 10–12 minutes until thickened and bright red.: When you add the chopped strawberries , the sauce will sizzle lightly and release fragrant steam. As it simmers, the fruit softens and the color intensifies to a vivid red. Stirring keeps it from sticking to the pan and ensures even thickening. Taste and adjust sweetness if needed, but avoid cooking so long that the berries break down completely into mush unless you prefer a jam like texture.
Spoon warm strawberry sauce over the casserole and serve hot.: Pouring the warm sauce over the baked casserole creates a glossy finish, and the contrast between the warm custard and the syrupy fruit is irresistible. You will hear a gentle sigh as steam rises and smell the bright, cooked berry notes mixing with baked bread and cinnamon. Serve promptly to preserve the contrast in temperatures. If you let the sauce sit too long, it can soak into the top and soften the crispness you worked to create.