Microwave marshmallows in a bowl and stir in 30 second increments until melted and "puffed up".

Stir in vanilla and water into melted marshmallows. This will help the marshmallows to "release" from the bowl.

Reserve 1 c powdered sugar for kneading fondant.

Slowly beat in powdered sugar, 1 cup at a time, until you have a sticky, stiff dough.

Spread some of the reserved powdered sugar onto a clean counter. Rub hands with butter and begin kneading sticky dough. The more you knead, the more workable and pliable the dough will be.

Form fondant into a ball and wrap tightly in plastic wrap. Refrigerate for a few hours.

Work with small amounts of fondant, so the rest will not dry out. To use, allow fondant to come to room temperature and roll onto flat surface dusted with corn starch.

Notes: Butter is used to grease hands while mixing powdered sugar and marshmallow. When storing fondant, butter a plastic bag or plastic wrap and keep air tight.