Melt butter in a large saucepan over low heat.

Blend in flour, salt, and pepper until smooth.

Cook, stirring constantly, for about 1 minute.

Remove from heat and gradually stir in milk until well combined.

Return to heat and cook until the sauce thickens and becomes bubbly.

Fold in ham, onion, green pepper, and cheddar cheese.

Pour the sauce mixture over the sliced potatoes in a large bowl.

Stir gently to coat the potatoes evenly.

Transfer the potato mixture into a buttered 13x9-inch baking dish.

Cover the dish tightly with foil.

Bake in a preheated oven at 350 degrees Fahrenheit for 30 minutes.

Remove the foil and continue to bake for 1 hour, or until the potatoes are tender and the top is golden brown.

Let the casserole stand for 10 minutes before serving.