Combine warm water, yeast, & sugar. Let sit until foamy. 5-10 min
Mix in flour, salt, olive oil, & beaten egg
Knead dough until smooth. Medium speed for 5-10 min until smooth & elastic
Gently knead in the pesto until combined
Place dough in oiled bowl/cover & rise for 1 hr until doubled
Shape into a loaf and place in a greased loaf pan
Cover & let rise until dough has risen above pan. Bake at 400°F for 25-35 min (205°C) internal temp of 190°
Let cool on rack