Sauté the onion in butter in a large skillet until tender. Add the soup and 1 1/2 cups of cheese. Gradually stir in the milk. Cook over medium heat until the cheese melts. Stir in the chicken and macaroni.
Pour the mixture into a greased 2 1/2 quart casserole. Sprinkle the top with the cracker crumbs.
Bake for 30 minutes or until thoroughly heated. Top with the remaining cheese and bake an additional 5 minutes.