Paneer Butter Masala, also called Butter Paneer, is a rich and creamy Indian curry made with paneer, spices, onions, tomatoes, cashews, and butter. As the name suggests, it’s cooked in butter, giving it a special buttery taste.
It’s one of the most loved dishes in Indian restaurants, just like Kadai Paneer, Palak Paneer, Matar Paneer, and Malai Kofta.
This Paneer Butter Masala is a dream dish for curry lovers! Soft paneer cubes are mixed in a smooth, creamy, and super tasty curry. My simple recipe will help you make restaurant-style butter paneer that tastes even better than what you get at restaurants. Make this once, and I bet you’ll never want to order it from outside again!
This is my all-time favorite butter masala recipe. I first shared it on my blog 6 years ago. After making it many times, I’ve updated it with helpful tips, ingredient substitutes, and even Instant Pot instructions that I’ve tested myself.
This recipe uses basic kitchen ingredients and doesn’t need anything fancy, except cream. I’ve also shared alternatives for some items.
To make Paneer Butter Masala, first, cook onions, tomatoes, and cashews with spices. Then blend everything into a smooth curry base. Cook it again with butter and more spices to make the butter masala. Checkout More Recipes In our Recipe Zoo!
Finally, add paneer cubes and cream. This makes the curry super creamy and delicious. You’ll get a restaurant-style paneer curry at home in just 30 to 40 minutes!
Paneer Butter Masala Ingredients
For Onion-Tomato Gravy:
- 2 tablespoons oil or butter (for sautéing)
- 1½ cups onions, chopped (roughly 2 medium onions)
- 1½ cups tomatoes, chopped (roughly 3 medium tomatoes)
- 1½ teaspoons ginger garlic paste (or chopped ginger and garlic)
- 10–12 cashew nuts
- 1½ teaspoons red chili powder (adjust to taste)
- ½ teaspoon turmeric powder
- 1 teaspoon garam masala
- Salt to taste
- 1 cup water (for blending the gravy)
Whole Spices (optional but flavorful):
- 2 green cardamoms
- 1 bay leaf
- ⅓ inch cinnamon stick
- 3 cloves
For Final Curry:
- 1½ tablespoons butter (for cooking the gravy)
- Prepared onion-tomato-cashew puree
- ¼ teaspoon red chili powder (for deeper color – optional)
- ½ cup water (to adjust gravy consistency)
For Paneer:
200 to 250 grams paneer, cubed (homemade or store-bought)
- 1 teaspoon kasuri methi (dried fenugreek leaves, crushed)
- 2 to 3 tablespoons cream (fresh or store-bought)
Garnish (Optional):
- 1 tablespoon cream
- 1 tablespoon chopped fresh coriander leaves
How to Make Paneer Butter Masala (Step-by-Step with Pictures)
Prepare the Gravy
1. This step is optional. If your store-bought paneer becomes hard after cooking, follow this step. (You can skip it if you are using homemade paneer.)
Take 2 cups of hot water in a bowl. Add 200 to 250 grams paneer cubes and soak them for 15–20 minutes. Then, drain the water and keep the paneer aside.
2. Heat 1 tablespoon oil in a pan. Add 2 green cardamoms and 1 cup chopped onions (about 120 grams, or 1 large onion chopped).
Cook on medium flame until the onions turn soft and light pink. This takes around 4 minutes.
Tip: If you don’t have ginger garlic paste, you can add ¾ inch ginger (peeled and chopped) and 3 garlic cloves (medium, chopped).
3. Now add the following:
- 1½ to 2 cups chopped tomatoes (about 300–350 grams or 3 medium tomatoes. I like to remove seeds before chopping.)
- ¼ teaspoon salt
Cook and sauté for 2 to 3 minutes, then cover the pan and cook until the tomatoes turn soft and mushy.
4. Once the onions and tomatoes are completely soft and mushy, add:
- ¾ to 1 tsp Kashmiri red chili powder (for mild spice and color)
- ¾ to 1 tsp garam masala (adjust as per your taste)
- 1 tsp coriander powder (optional)
- 15 whole cashew nuts
- ¾ tsp sugar (optional, to balance flavors)
5. Cook this onion-tomato masala on low heat for another 2 to 3 minutes until it smells nice and aromatic. Then turn off the stove.
6. Let the mixture cool completely, then transfer it to a blender. Add 1 cup water and blend until you get a super smooth puree.
Tip: To cool it faster, add some ice-cold water to the blender first, then pour in the warm mixture.
7. Blend the mixture into a very smooth and creamy paste.
If your blender isn’t powerful, you can strain it through a fine sieve to remove lumps and get a silky texture.
Make Paneer Butter Masala
8. Heat a pan on low flame and add 1½ tablespoons butter. Once the butter melts, add the following whole spices (skip if not available):
- 2 green cardamoms
- 1 bay leaf
- ⅓ inch cinnamon stick
- 3 cloves
9. When the whole spices start to crackle, add 1½ teaspoons ginger garlic paste. Cook it for 1 minute or until the raw smell goes away.
Make sure you cook this on low to medium heat so the paste doesn’t burn.
Tip: If you already used chopped ginger and garlic with onions earlier, you can skip this paste.
10. Now pour in the smooth onion tomato puree.
You can also add ¼ teaspoon red chili powder for a richer color (this is optional).
Cook on low flame to avoid any splattering.
11. Right after that, add ⅓ cup water and stir well to make a gravy-like texture.
If the gravy feels too thick, just add more water as needed.
12. Cover the pan and cook on medium heat until the gravy becomes thick and tasty.
This usually takes about 10 to 12 minutes.
13. Once the paneer butter masala gravy is ready, you’ll see oil or butter floating on top.
That’s a sign it’s done!
Open the lid and cook more if the gravy needs to thicken.
Do a taste test and add salt if needed.
You can also remove the whole spices using a spoon or skimmer if you want.
14. When the gravy is perfect, add 200 to 250 grams of paneer (cottage cheese).
Take 1 teaspoon kasuri methi (dried fenugreek leaves) in your palm, crush it, and then add it to the curry.
Only add paneer once the gravy is not too watery.