Cut bacon into bite-sized pieces and cook in a large pot over medium-high heat until crispy, about 8-10 minutes, stirring occasionally. Remove bacon with a slotted spoon and set aside on a paper towel, reserving 2 tablespoons of the bacon grease in the pot. While bacon cooks, dice the jalapeños into 1/4-inch pieces (I like to seed them for less heat, but leave some seeds if you prefer extra spice), dice the onion, mince the garlic, peel and cube the potatoes into 1/2-inch pieces, and have all ingredients prepped and ready before you begin the next step.

Return the pot with the 2 tablespoons reserved bacon grease to medium heat and add the diced jalapeños and onion. Sauté for 3-4 minutes, stirring occasionally, until the vegetables begin to soften and release their flavors. Add the minced garlic and cook for another 30 seconds, stirring constantly to prevent burning. This technique of building flavors gradually—called blooming—ensures the aromatics are fully developed rather than raw-tasting.

Sprinkle the flour over the vegetable mixture and stir constantly for about 1-2 minutes to cook out the raw flour taste and create a light roux. Gradually whisk in the chicken broth, stirring well to break up any lumps, then slowly add the half-and-half while whisking to create a smooth, creamy base. Add the smoked paprika and stir to combine, ensuring there are no flour lumps remaining in the liquid.

Add the cubed potatoes to the pot and increase heat to medium-high, bringing the soup to a gentle boil. Once boiling, reduce heat to medium and simmer uncovered for 25-30 minutes, stirring occasionally, until the potatoes are completely fork-tender. The potatoes will naturally begin to break down slightly at the edges, which helps thicken the soup and create a creamy texture.

Remove the pot from heat. Cut the cream cheese into small cubes so it melts quickly and evenly—I always do this to prevent lumpy pockets of cream cheese in the final soup. Stir in the cream cheese and sharp cheddar cheese, stirring constantly until completely melted and smooth. Add the kosher salt, freshly ground black pepper, and hot sauce if using, tasting as you go and adjusting seasonings to your preference.

Ladle the soup into bowls and top each serving with a generous handful of crispy bacon bits, sliced green onions, extra shredded cheddar cheese, and fresh jalapeño slices. The combination of hot creamy soup with cool, crisp toppings creates the perfect texture and flavor contrast that makes jalapeño popper soup so satisfying.