Preheat the Oven: Begin by setting the oven to a temperature of 350°F (175°C). Proceed to lightly grease a 9x13-inch baking dish to prevent sticking.
Prepare the Steak Patties: In a substantial mixing bowl, combine the ground beef, diced onion, crumbled saltine crackers, 1 cup of milk, garlic powder, salt, and pepper. Mix these ingredients thoroughly until the mixture is uniformly combined. Following this, shape the mixture into 6-8 patties, either oval or rectangular in shape.
Coat and Brown the Patties: Dust each patty lightly with flour, ensuring to shake off any excess. Heat a large skillet over medium-high heat and melt the butter. Place the patties in the skillet and fry them until they are browned on each side, approximately 3 minutes per side.
Prepare for Baking: Transfer the browned patties to the previously greased baking dish, arranging them in a single layer. In a separate bowl, blend the cream of mushroom soup with 1.5 cups of milk until the mixture is smooth. Evenly pour this gravy mixture over the patties in the baking dish.
Bake to Perfection: Cover the baking dish with aluminum foil and place it in the oven. Bake for 50 minutes. After this time, remove the foil and continue to bake for an additional 10 minutes, allowing the top of the patties to achieve a slight browning.
Serve and Enjoy: Once baking is complete, remove the dish from the oven and allow it to rest for a few minutes before serving. Serve the patties generously smothered in the creamy mushroom gravy, accompanied by your preferred side dishes such as mashed potatoes, corn, or green beans.