In a large mixing bowl, combine the all-purpose flour, instant yeast, and salt. Stir to mix evenly.
Add the warm water to the dry ingredients and stir with a wooden spoon until a shaggy dough forms.
Fold in the shredded sharp cheddar cheese until evenly distributed throughout the dough.
Cover the bowl with plastic wrap or a clean kitchen towel and let the dough rest at room temperature for 3 to 4 hours, or until it has doubled in size and bubbles appear on the surface.
Preheat the oven to 450°F (230°C). Place a heavy covered Dutch oven or oven-safe pot with a lid inside the oven to heat for 30 minutes.
Carefully remove the hot Dutch oven from the oven. Lightly flour a work surface and turn the dough out onto it.
Using floured hands, shape the dough into a round loaf by folding the edges toward the center.
Place the dough seam-side down on a sheet of parchment paper.
Carefully transfer the dough with the parchment paper into the preheated Dutch oven. Cover with the lid and bake for 30 minutes.
Remove the lid and bake for an additional 15 minutes, or until the bread is golden brown and crusty.
Remove the bread from the Dutch oven and let it cool completely on a wire rack before slicing.