Preheat oven to 350 degrees.

Prepare a large casserole baking pan by coating lightly with oil or cooking oil spray.

Make a white sauce by melting margarine in a small pan. Stir in flour. Gradually add milk, stirring constantly.

Cook, stirring constantly, until slightly thickened. Remove from heat. Stir in cheese until melted and smooth.

Add salt and pepper.

Place a layer of potatoes and onion in a prepared casserole pan, using approximately 1/4 of the potatoes and 1/4 cup onion.

Spread with 1/2 cup of the sauce prepared in steps 2 and 3.

Repeat layers, making a total of 4.

Bake for one hour.