Place the casserole dish inside a larger roasting pan or baking dish. Carefully pour water into the outer pan until it reaches about halfway up the sides of the casserole, creating a water bath.
Carefully transfer to the center rack of the oven and bake for 50 minutes.
Remove the foil and continue baking uncovered for 30–35 minutes, or until the top begins to brown and turn lightly golden. The potatoes should be mostly tender, offering just slight resistance when pierced with a fork.
Carefully remove the casserole from the oven, keeping it in the water bath. Evenly sprinkle the remaining one-third of the reserved cheese over the top, then return it to the oven.
Bake for an additional 20–25 minutes, until the top is golden, bubbly, and crisp, and the potatoes are fully fork-tender.
Remove from the oven, then carefully lift the casserole dish out of the water bath and transfer it to a wire rack.