In a small bowl, mix warm milk, sugar, and active dry yeast. Let it sit for about 5 minutes until foamy.

In a large bowl, combine the flour, salt, melted butter, and egg. Pour in the yeast mixture and mix until a dough forms.

Transfer the dough onto a floured surface and knead for about 5-7 minutes until smooth and elastic.

Place the dough in a greased bowl, cover it with a clean cloth, and let it rise in a warm place for about 1 hour, or until it has doubled in size.

While the dough rises, mix the cream cheese, powdered sugar, and vanilla extract until smooth. Set to the side.

Once the dough has risen, roll it out into a rectangle. Spread the cream cheese mixture evenly across the dough, and sprinkle with blueberries.

Starting from one long edge, tightly roll the dough into a log. Cut the log in half lengthwise, exposing the layers inside.

Twist the two halves together and shape it into a loaf. Place it in a greased loaf pan.

Cover the loaf with a cloth and let it rise again for about 30 minutes.

Preheat your oven to 350°F (175°C) and bake for 30-35 minutes, or until golden brown.

Allow the babka to cool in the pan for 10 minutes before transferring it to a wire rack. Slice and serve warm!