The Cake Everyone Talks About — Butterscotch Cake with Caramel Icing

Old-fashioned flavor, modern-day perfection — this Butterscotch Cake with Caramel Icing is pure comfort in every bite . Rich, buttery, and layered with creamy caramel sweetness, this cake will make your guests beg for the recipe!
If you love cozy desserts that taste like they’ve been passed down for generations, you’re in for a treat.

Before we dive in — thank you for stopping by my kitchen here on Poulef! If you love nostalgic, comforting desserts, be sure to subscribe to my email list for weekly recipes just like this one.

Overview of the Recipe

This Butterscotch Cake with Caramel Icing is a showstopper — the kind of dessert that tastes like home but looks like it belongs in a bakery window. It’s perfect for birthdays, holidays, Sunday suppers, or those cozy fall evenings when the air smells like cinnamon and butter.

Why You’ll Love It

• Rich and nostalgic flavor: Old-fashioned butterscotch meets smooth caramel icing.
• Soft, moist crumb: A special trick (hint: sour cream!) keeps it tender for days.
• Crowd-pleaser: Ideal for potlucks, bake sales, or dinner parties.
• Simple ingredients: Everything you need is probably already in your pantry.

What It Tastes Like

Imagine the deep, buttery sweetness of brown sugar melting into a velvety caramel finish. Each bite is moist, rich, and balanced — never overly sweet. The caramel icing has just enough salt to make the flavors pop.

Health/Nutritional Notes

While it’s a classic dessert (read: indulgent), you can lighten it up by using Greek yogurt instead of sour cream and coconut sugar instead of brown sugar.

Ingredients You’ll Need

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• 1 cup unsalted butter, softened
• 1 ½ cups light brown sugar, packed
• 3 large eggs
• 2 cups all-purpose flour
• 1 tsp baking powder
• ½ tsp baking soda
• ½ tsp salt
• ¾ cup sour cream (or plain Greek yogurt)
• ½ cup whole milk
• 1 tbsp vanilla extract
• ½ cup caramel sauce
• Optional: ½ cup chopped pecans or toffee bits for topping

For the Caramel Icing:

• ½ cup unsalted butter
• 1 cup light brown sugar
• ¼ cup heavy cream
• 2 cups powdered sugar, sifted
• 1 tsp vanilla extract
• Pinch of salt

Tools Needed

• Electric mixer or stand mixer
• Two 9-inch round cake pans
• Parchment paper
• Saucepan (for icing)
• Spatula and whisk

Substitutions & Additions

• Substitute almond extract for a nutty twist.
• Add a pinch of espresso powder to deepen the flavor.
• Top with sea salt flakes for that perfect sweet-salty bite.

How to Make Butterscotch Cake with Caramel Icing

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1. Preheat your oven to 350°F (175°C). Grease and line two 9-inch pans with parchment paper.
2. Cream the butter and sugar until light and fluffy, about 3–4 minutes.
3. Add eggs one at a time, beating well after each addition. Stir in the vanilla.
4. Mix dry ingredients — flour, baking powder, soda, and salt — in a separate bowl.
5. Alternate adding dry ingredients and milk/sour cream mixture into the butter-sugar mix, starting and ending with flour.
6. Stir in caramel sauce until smooth and glossy.
7. Pour batter evenly into pans and bake 30–35 minutes, or until a toothpick comes out clean.
8. Cool completely before icing.

For the Icing:

1. Melt butter in a saucepan over medium heat. Add brown sugar and stir until dissolved.
2. Whisk in cream and bring to a gentle simmer for 2 minutes.
3. Remove from heat, let cool slightly, then whisk in powdered sugar, vanilla, and salt.
4. Spread generously between cake layers and over the top.

Your kitchen will smell like heaven at this point — resist cutting into it too soon!

What to Serve with Butterscotch Cake

Pair with:

• A scoop of vanilla ice cream or salted caramel gelato.
• A drizzle of warm butterscotch sauce.
• Coffee, chai latte, or an Irish cream cocktail for adults.

Try it alongside my Chocolate Chip Banana Bread, Southern Caramel Pecan Pie, or Classic Pumpkin Loaf.

Tips for Making It Perfect

• Don’t overmix once you add the flour — this keeps the crumb soft.
• Let the icing cool slightly before spreading for that perfect thick texture.
• Wrap layers tightly if baking ahead — it stays moist for up to 3 days!
• Use room temperature ingredients for an even rise.

Storage Instructions

• Room temperature: Store covered for up to 2 days.
• Refrigerate: Up to 5 days in an airtight container.
• Freeze: Wrap slices individually in plastic wrap, freeze up to 2 months. Thaw overnight in the fridge.

General Information

This recipe has its roots in old Southern kitchens — a true vintage butterscotch cake that’s been modernized for today’s baker. It’s the dessert equivalent of a warm hug, and it never goes out of style.

Frequently Asked Questions

1. Can I make this as cupcakes?
Yes! Bake for 18–20 minutes at 350°F.

2. Can I use store-bought caramel sauce?
Absolutely — just pick one that’s thick and buttery.

3. Why is my icing grainy?
The sugar may not have fully dissolved — next time, simmer it a bit longer.

4. How do I make it less sweet?
Add a pinch of salt or reduce powdered sugar in the icing.

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Conclusion

There’s a reason I call this The Cake Everyone Talks About — one bite and you’ll understand why! It’s buttery, nostalgic, and just indulgent enough to make any day feel special.

If you love this, try my Old-Fashioned Butter Cake or Cinnamon Roll Loaf.

Now go bake it, share it, and enjoy every crumb!

Interactive Elements

I’d love to see your cake creations! Tag me on Pinterest or leave a comment with your twist on this recipe.

Nutritional Information (Per Serving)

Calories	Carbs	Protein	Fat	Sugar	Sodium
480 kcal	58g	5g	26g	42g	210mg

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