Heat oven to 375°F. In ungreased 2-quart casserole, cook frozen vegetables in microwave as directed on bag; drain. Stir in ham.
In 2-quart saucepan, melt butter over medium heat. Add flour, salt and pepper; cook, stirring constantly with wire whisk, until bubbly and smooth. Remove from heat. Stir in milk and 1/2 cup of the cheese. Heat to boiling, stirring constantly. Boil and stir 1 minute. Pour over vegetables and ham; stir gently to mix. Sprinkle remaining 1 cup cheese over top.
Bake uncovered 25 to 30 minutes or until bubbly around edges.