Grandma’s Cream Cheese Cut-Out Cookies

A treasured family recipe from the Old Castle Cottage kitchen.

There are some recipes that simply feel like Christmas the moment you pull out the ingredients. For me, these cream cheese cut-out cookies are one of them. This is my grandmother’s recipe written in fading ink on an old recipe card, softened by years of holiday baking, laughter, and little hands helping at the counter.

Every December, these cookies were the very first we baked . The scent of almond extract filled the kitchen, Christmas music played  in the background. I make these same cookies with my own family and every bite tastes like a sweet piece of childhood memories.

If you’re looking for a soft, buttery cutout cookie that holds its shape beautifully and tastes even better with a little frosting or powdered sugar, this recipe is for you.

✨ Why We Love These Cookies

  • They’re incredibly soft thanks to the cream cheese
  • They keep their shape perfect for stars, trees, bells, and snowflakes
  • The almond extract gives them that classic old-fashioned bakery flavor
  • They freeze beautifully
  • They’re the kind of cookies kids love to help decorate
  • You can bake and freeze unfrosted for up to 3 weeks

This really is the perfect Christmas cookie to make year after year.

📜 Grandma’s Original Recipe

Ingredients

  • 1 cup white sugar
  • 1 cup butter, softened
  • 1 (3 oz) package cream cheese, softened
  • 1 large egg yolk
  • ½ teaspoon salt
  • ½ teaspoon almond extract
  • ½ teaspoon vanilla extract
  • 2 ¼ cups all-purpose flour

Instructions

  1. Cream together the butter, cream cheese, and sugar until smooth and fluffy.
  2. Add the egg yolk, almond extract, vanilla extract, and salt. Mix until combined.
  3. Slowly add the flour, mixing just until a soft dough forms.
  4. Divide the dough into two disks, wrap, and chill for at least 1 hour . I make the dough the day before and chill overnight.  You can also freeze the dough discs
  5. Preheat your oven to 350°F (175°C).
  6. Roll dough out on a lightly floured surface to about ¼-inch thickness.
  7. Use your favorite Christmas cookie cutters—angels, trees, stars, bells.
  8. Place cookies on an ungreased baking sheet and bake for 8–10 minutes, or until the edges are just turning golden.
  9. Cool on wire racks, then decorate with icing, sprinkles, or powdered sugar.

These cookies melt in your mouth and are perfect for gifting, cookie swaps, or enjoying with a cup of tea beside the Christmas tree.

🎄 A Family Tradition at Old Castle Cottage

Every time I make these, I’m reminded of the simple magic of holiday baking quiet afternoons in the kitchen, daughters and grandchildren decorating with far too many sprinkles, and the joy of carrying on recipes that have lived through generations.

From Grandma’s handwritten card to your own Christmas table, I hope these cookies bring you as much joy as they have brought to our family.

If you make them, tag me at @oldcastlecottage so I can see your beautiful creations.

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