Prepare the Dough:

In a medium mixing bowl, whisk together milk, butter, and egg until smooth.

In a large mixing bowl, combine flour, yeast, sugar, and salt, whisking until well blended.

Pour the wet ingredients into the flour mixture. Stir with a spatula until there is no dry flour left, scraping the sides of the bowl as needed.

Transfer the dough to a clean, dry surface. Knead for about 5 minutes until it forms a soft, smooth ball. The high fat content from the butter and milk makes it easy to knead by hand, eliminating the need for a stand mixer.

Proof the Dough (First Rise):

Place the dough back into the mixing bowl, lightly greasing it with a bit of vegetable oil. Cover with a lid to keep the dough from drying out. Allow it to rise at room temperature for 1 hour or overnight in the refrigerator until it doubles in size.

Shape the Lemon Rolls (Second Rise):

Roll the dough onto a floured surface into a 20x14-inch rectangle.

Spread softened butter evenly over the dough.

Mix together sugar, 2 tablespoons of lemon zest, and vanilla extract. Sprinkle this mixture evenly over the buttered dough.

Tightly roll the dough into a log, pinching the ends to seal.

Cut the log into 12 even pieces, each about 1.5 inches wide, and place them in a greased 9x13-inch casserole pan.

Cover the pan with plastic wrap or place it in a large Ziploc bag. Allow the rolls to rise in a warm place for 1 hour until they double in size.

Bake the Lemon Rolls:

Preheat the oven to 375°F.

Sprinkle the remaining lemon zest evenly over the rolls. Bake for 20-25 minutes until golden brown, covering with aluminum foil halfway through if they brown too quickly. Let the rolls cool in the pan for 10 minutes.

Make the Cream Cheese Icing:

Using a hand mixer or stand mixer, beat the softened cream cheese on medium speed until smooth.

Add confectioners' sugar and lemon juice, beating until creamy and smooth. You can also mix these ingredients together using a whisk and spatula.

Spread the cream cheese icing over the warm rolls and serve. Sprinkle extra lemon zest on top, if desired.