Gather all your ingredients. Measure and prepare all the ingredients except for the pearl onions and mushrooms. Preheat the oven to 325˚F.
In a large Dutch oven, add the sliced bacon on medium-low heat. Cook the bacon, stirring, until it browns and releases its fat. Use a slotted spoon to remove bacon to a bowl.
Add the cubed beef to the Dutch oven. Stir to coat with the remaining bacon fat. Increase the heat to medium-high and sear the beef until brown on all sides. You should do this in batches. Remove to a bowl with a slotted spoon when brown.
Lower the heat to medium and add 2 tablespoons of unsalted butter. Add the chopped the carrots and diced onion to the pot, stir, and sweat for 2 to 3 minutes. Add the chopped garlic and cook for another minute.
Add the tomato paste, stirring it in to the carrot/onion mixture. Cook until the tomato paste deepens in color.
Sprinkle the mixture with flour and stir to combine. Cook for a couple of minutes, stirring constantly.
Add the wine and the beef stock to the pot. Scrape down the brown bits (fond) on the side of the pot. Stir in the beef bouillon and bring the bourguignon to a simmer.
Return the beef and the bacon back to the pot. Add the thyme sprigs and bay leaves. Cover the pot with a sheet of parchment and then place the lid on the pot. Place the Dutch oven in the preheated oven. Cook for 2 1/2 hours. Check the bourguignon occasionally, stirring in 1/2 cup beef stock, as needed.
At the 2 1/2 mark, melt 2 tablespoons unsalted butter in a cold 10-inch skillet. Bring to medium-high heat until the butter melts and foams. Add a tablespoon of oil and the sliced mushrooms. Cook the mushrooms until slightly brown. Add the pearl onions for about 5 minutes, until brown. Season the mixture with salt and pepper.
Remove the bourguignon from the oven. Remove the lid and add the mushroom/onion mixture to the Dutch oven and stir. Let the beef bourguignon sit covered on the stove top for 30 minutes until ready to serve.
Optional: serve with finely chopped parsley sprinkled on top of the. bourguignon.