1 lb. ground beef (chuck or round)
1/3 c. dried bread crumbs
1/3 c. milk
1 egg
2 tbsp. chopped onion
1 tsp. salt
Pepper to taste
2 tbsp. oil for browning

Mix and make into little balls; brown on both sides. Drain on paper towels.

SAUCE:

1 can cream of mushroom soup
8 oz. cream cheese
1/2 c. water

Mix until smooth. Simmer and add meatballs.