Cut onions into thin slices; separate into reings. Place onion rings in an ungreased 1-1/2 quart casserole. Melt butter in saucepan; blend in flour, and gradually stir in milk. Cook, stirring constantly, until thickened.
Add salt, pepper, and cheese; stir until cheese has melted. Pour sauce over onions. Bake, uncovered, at 325 degrees about 45 minutes.
