Activate the Yeast: In a large mixing bowl, combine the warm water, warm milk, and 1 tablespoon of granulated sugar. Sprinkle the active dry yeast over the top and stir gently. Let it sit for 5-10 minutes until foamy, indicating the yeast is active.
Prepare the Dough: To the foamy yeast mixture, add the remaining ¼ cup granulated sugar, salt, melted butter, and the large egg. Whisk until well combined. Gradually add the all-purpose flour, one cup at a time, mixing with a wooden spoon or a stand mixer with a dough hook until a shaggy dough forms.
Knead the Dough: Turn the dough out onto a lightly floured surface. Knead for 8-10 minutes, or until the dough is smooth, elastic, and no longer sticky. If using a stand mixer, knead with the dough hook for 6-8 minutes. The dough should pass the “windowpane test” (you can stretch a small piece thin enough to see light through it without tearing).
First Rise (Bulk Fermentation): Lightly grease a large bowl with oil. Place the kneaded dough in the bowl, turning once to coat. Cover the bowl with plastic wrap or a clean kitchen towel and let it rise in a warm place for 1 to 1 ½ hours, or until doubled in size.
Prepare Cream Cheese Filling: While the dough is rising, in a small bowl, combine the softened cream cheese, 2 tablespoons granulated sugar, and vanilla extract. Mix with a fork or whisk until smooth and creamy. Set aside.
Incorporate Blueberries: Once the dough has doubled, gently punch it down to release the air. Turn the dough out onto a lightly floured surface. Flatten the dough into a rough rectangle. Sprinkle the blueberries evenly over the dough. Gently fold the dough over itself a few times and knead briefly (1-2 minutes) to evenly distribute the blueberries without crushing them too much.
Shape the Loaf with Cream Cheese: Roll the dough into a rectangle, approximately 12×16 inches. Spread the cream cheese mixture evenly over the entire surface of the dough, leaving a ½-inch border along one long edge. Starting from the long edge opposite the border, tightly roll the dough into a log. Pinch the seam closed to seal.
