Add potatoes and cook until tender, about 15 minutes.
Drain and mash with milk.
Meanwhile, place sausage in a large, deep skillet. Cook over medium high heat until evenly brown. Stir in green pepper and onion and cook for about 5 minutes.
Fold cubed bread into potatoes, then gently fold in sausage mixture.
Transfer to a 9x13 inch baking dish.
Bake in preheated oven for 30 to 45 minutes, or until heated through.