Grease a 13x9-inch baking dish. Spread the bread cubes in an even layer on the bottom.
In a large skillet over medium-high heat, cook the sausage and diced red bell pepper until the sausage is browned and cooked through, about 8-10 minutes. Use a spoon to break up the meat as it cooks. Drain off any excess fat.
Spoon the cooked sausage and pepper mixture evenly over the bread cubes in the baking dish.
In a large bowl, whisk together the eggs, milk, condensed soup, and black pepper until well combined. Stir in 1 cup of the shredded cheddar cheese.
Pour the egg mixture evenly over the sausage and bread layers. Sprinkle the remaining 1/2 cup of cheese on top.
Cover the dish with plastic wrap or a lid and refrigerate for at least 1 hour, or overnight.
When ready to bake, preheat your oven to 350°F (175°C). Remove the cover from the baking dish.
Bake for 50-55 minutes, or until the center is set and the top is golden brown. The casserole is done when a knife inserted into the center comes out clean and the internal temperature reaches 160°F (71°C).
Let the casserole rest for 10 minutes before slicing and serving. Garnish with chopped green onions, if desired.