In small bowl, stir together milk, sugar and yeast. Let stand 10 minutes or until foamy.
In large bowl, combine milk mixture, butter and egg. Using electric mixer fitted with dough hook, beat on low speed until combined. Add flour and salt; beat until dough is smooth and elastic, about 5 to 6 minutes.
Transfer dough to greased bowl. Cover with plastic wrap and let rise in a warm place until doubled, about 1 hour.
Preheat oven to 350°. Prepare 9 in. x 5 in. loaf pan with vegetable pan spray.
On lightly floured surface, roll dough out to a 20 in. x 12 in. rectangle. Spread pesto evenly over dough surface. Roll up from long end as for cinnamon rolls, pinching seam and ends to seal. Cut log in half lengthwise. Twist pieces together and place in prepared pan in an “S” shape, tucking ends under. Cover pan and let rise in a warm area 30 minutes.
Uncover loaf and bake 32 to 37 minutes or until loaf is golden brown and sounds hollow when tapped. Let cool in pan on cooling grid 5 minutes, then turn out onto grid to cool completely.
Tip- This recipe can also be made by hand. Stir together ingredients until well-combined and a dough begins to form. Then, knead on a lightly floured surface until dough is smooth and elastic.