Butter an 8-inch non-stick baking dish (or line with buttered parchment paper) and set aside.

Melt butter and peanut butter until the mixture comes to a boil. Remove from the heat.

Add vanilla extract, then stir in the powdered sugar until smooth and no lumps remain.

Pour the fudge mixture into the prepared pan and smooth the top. Press a piece of plastic wrap directly on the fudge and refrigerate until set, at least 1 hour. Cut into squares and serve. Fudge can be stored at cool room temperature in an airtight container for up to 1 week, or in the refrigerator for up to 1 month.