Preheat oven to 350 F and grease a 1 1/2 quart casserole dish.
In a large saucepan, melt the butter or margarine.
Add the onions and cook, covered over medium-low heat 10 -15 minutes or until tender, stirring occasionally.
Remove from heat.
Stir the 2 cups cheddar cheese, the biscuit mix, and pepper into the onion mixture.
Transfer the mixture to the prepared casserole dish.
Sprinkle with the 1/2 cup cheddar, if desired.
Bake uncovered in the 350 oven for 30 minutes.