Activate the Yeast: In a microwave-safe bowl, warm the milk in the microwave for 1 minute until it’s between 98°F to 105°F. Stir in the sugar and active dry yeast. Set aside for 10 minutes, until it becomes frothy on top.
Mix the Wet Ingredients: In a large mixing bowl, whisk the frothy yeast mixture with one whole egg and one egg yolk. (Reserve the egg white in a bowl in the fridge for the topping later).
Add the Dry Ingredients: Add the flour, garlic powder, onion powder, Italian seasoning, and salt. Mix until it forms a shaggy dough.
Knead the Dough: On a clean work surface, knead the dough by hand for about 5 minutes, until the dough is smooth and elastic.
Let the Dough Rise: Place the dough ball back in the mixing bowl and cover it with a clean kitchen towel. Let the dough rise in a warm spot until it has doubled in size, after about 2 hours.
Fill the Dough: Grease or line a loaf pan with parchment paper and set aside. On a clean work surface, roll out the dough with a rolling pin into a rectangle so it’s as long as your loaf pan and at least twice as wide. (My dough usually ends up around 1 cm thick).
Add the Filling: Spread the pesto in a thin, even layer leaving a 1-inch border around the edges. Sprinkle the breadcrumbs on top, to help absorb excess moisture.
Roll the Dough: Gently roll up the dough from a shorter edge. Pinch the seam closed, and tuck the two short ends underneath the log of dough. Place it seam-side-down in the prepared loaf pan, so the seam is directly under the center of the loaf.
Proof the Dough: Cover the loaf pan with a kitchen towel. Set aside to proof for 30 minutes to 1 hour, until the loaf has puffed up. The dough is done proofing when an indent made by your finger springs back to its original shape after 2-3 seconds.
Add the Egg Wash: Preheat the oven to 325°F. Whisk the egg and water in a small ball to make an egg wash. Once the dough is done proofing, brush the top with the egg wash and sprinkle ¼ teaspoon Italian seasoning on top.
Bake the Bread: Bake for 50 to 60 minutes, until the loaf is golden brown and reaches an internal temperature of 190°F–200°F. I usually add a large pieces of aluminum foil folded in half over my bread after 30 minutes, to prevent the top from getting too brown. Allow it to cool for at least 1 hour before slicing. Enjoy!!