Caramelized Shallot Butter

Caramelized shallot butter in a small jar

Can we chat about smells for a second? The first day I made this caramelized shallot butter, our house smelled like sweet, earthy shallots and wine for the next 24 hours and I loved it. Certain cooking smells just have that warm, cozy hug quality. Onions or garlic cooking in butter has always been my #1. If they bottled the scent, I’d for sure wear it. But, these caramelized shallots, with thyme and generous splash of marsala wine, are a close second.

Caramelized shallots in a pan

Look at that shalloty gorgeousness. Now consider folding it into softened butter with a pinch of salt, and spreading it on good, crusty bread. I mean… just stop.

Toasted bread with caramelized shallot butter on top

This bread came from a recently closed restaurant on the beach called Coastal Provisions, where they’ve always made their own bread- using the same starter since they opened 13 years ago. My mom picked up a couple loaves the other day and gave me one, casually mentioning how good it would be with caramelized shallot butter on top… My mom and I are exactly the type of people to speak casually about caramelized shallot butter.

To caramelized shallots, you just need a little butter, olive oil, salt, and time – about 30 minutes. They’ll gradually break down, releasing their sugars, while they darken in color and deepen in flavor. When they’re close to done, I throw in a little fresh thyme and some sweet, rich marsala wine. Once the shallots have cooled a bit, fold them into softened unsalted butter, and add a pinch or two of salt and pepper to your taste. It’s so simple, and worth doing just for the house perfume it creates.

Caramelized shallot butter in a small jar

Beyond toasted bread, try this butter on steak, green beans, or mashed or baked potatoes. Then, think about becoming more obsessed with compound butters and making this Roasted Garlic Miso Butter.


Caramelized Shallot Butter

Caramelized shallot butter in a small jar

Sweet caramelized shallots cooked down with thyme and a splash of nutty marsala wine, folded into soft butter. All you need is some crusty bread or a big, juicy steak to put it on!

  • Author: Megan
  • Prep Time: 5 minutes, plus 15 minutes cooling time
  • Cook Time: 35 minutes
  • Total Time: 55 minutes
  • Yield: About 3/4 C 1x
  • Method: Stovetop


  • 1 1/2 TBS extra virgin olive oil
  •  1 stick unsalted butter, softened, plus 2 TBS for the pan
  • 6 shallots, thinly sliced
  • salt and pepper
  • 2 sprigs of fresh thyme
  • a big splash of marsala wine


  1. Heat the olive oil and 2 TBS butter in a skillet over medium heat. Add the shallots and season with a pinch of salt. Cook, stirring occasionally, until some color develops – about 5 minutes.
  2. Turn the heat down to low and continue to cook, stirring the shallots occasionally, until they are soft and dark in color. 
  3. Strip the leaves off the thyme and toss them in, along with a big splash of marsala wine. Cook until the liquid has reduced, about 3 more minutes. Turn off the heat and allow the shallots to cool for about 15 minutes.
  4. Stir the shallots into the softened butter and season with salt and pepper to taste. 


If you don’t have marsala wine, try sherry.

Keywords: Shallot butter, compound butter

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