Step 1: In a large mixing bowl, combine the warm milk, warm water, and sugar. Sprinkle the active dry yeast over the liquid and let it sit for 5-10 minutes. The mixture should become frothy, indicating your yeast is active and ready to work its magic.
Step 2: Add the softened unsalted butter and salt to the activated yeast mixture. Stir well to combine.
Step 3: Gradually add about half of the all-purpose flour to the wet ingredients, mixing until a shaggy dough begins to form.
Step 4: Continue adding the remaining flour, a little at a time, mixing until all the flour is incorporated and the dough starts to come together.
Step 5: Knead the dough. If kneading by hand, transfer the dough to a lightly floured surface and knead for about 10 minutes until it becomes smooth, elastic, and no longer sticky. If using a stand mixer, attach the dough hook and knead on medium speed for about 8 minutes until the dough is smooth and springs back when lightly touched.
Step 6: Place the kneaded dough into a lightly greased bowl, turning once to coat. Cover the bowl with plastic wrap or a clean kitchen towel. Let it rise in a warm, draft-free spot for 1 to 1½ hours, or until it has clearly doubled in size. This is the first rise.
Step 7: Once the dough has doubled, gently punch it down to release the air. Turn the dough onto a lightly floured surface.
Step 8: Shape the loaf. Flatten the dough into a rectangle. Starting from one of the shorter ends, tightly roll the dough into a log. Pinch the seam closed along the bottom and at the ends to create a neat loaf shape.
Step 9: Place the shaped dough, seam-side down, into a greased 9x5-inch loaf pan.
Step 10: Cover the loaf pan loosely with plastic wrap or a clean towel. Let the dough rise again for about 30-45 minutes, or until it has risen nicely just above the edge of the pan. This is the second rise.
Step 11: While the dough is completing its second rise, preheat your oven to 375°F (190°C).
Step 12: Bake the bread for 30-35 minutes, or until the top is golden brown and the loaf sounds hollow when tapped. An instant-read thermometer inserted into the center should read between 190-200°F (88-93°C).
Step 13: Immediately remove the bread from the pan and transfer it to a wire rack to cool completely. This is crucial for preventing a soggy bottom and allowing the crumb to set properly.