Pour the lukewarm water into a mixing bowl then sprinkle the yeast and sugar over it. Stir it to get all of the yeast wet and let it sit for 5-10 minutes. The yeast on the top of the water should be bubbly and foamy. Add in the flour and salt and stir it all together until the dough is thoroughly mixed. It will still look rough.

Cover the top of the bowl with a clean tea towel and place it in the Instant Pot. Push the yogurt button on the IP until it’s on the normal setting, and let it rise for 25 minutes. Afterward, the dough should look puffy but won’t be doubled. Remove the bowl from the Instant Pot, uncover it, and spread a generous layer of flour over the tea towel that was over the top of the bowl.  Dump the dough out onto it, then bring the edges of the dough up and around, pinching it together on the bottom to form a ball. 

Preheat the oven to 450°F and place your dutch oven or baking stone inside.

Lift the corners of the towel with the ball of dough inside and place it back in the bowl. There may be some dough and flour on the inside, but it won’t mess up anything. Place it back in the Instant Pot, again on Yogurt setting, normal level, for another 15 minutes.

When the dough has completed it’s second rise, remove the bowl from the Instant Pot. Place a sheet of parchment down and carefully turn the dough out onto it. Carefully remove the floured towel and slash the loaf down the center.

Working quickly, open the oven and remove the lid from the Dutch oven. Gently place the loaf inside, replace the lid, close the oven and bake for 25 minutes. Remove the lid and bake for another 15-20 minutes, or until the bread is golden brown and sounds hollow when you thump it with your finger.

Remove the baked loaf from the oven, allow it to cool, then slice and enjoy.