1/4 c. butter
1 16-oz. package of miniature marshmallows
4 T. water
1 t. vanilla extract
2 pounds, confectioners' sugar, divided
Place the butter in a shallow bowl, and set aside.
Place the marshmallows in a large microwave-safe bowl, and microwave on High for 30 seconds to 1 minute to start melting the marshmallows. Carefully stir the vanilla and water into the hot marshmallows, and stir until the mixture is smooth. Slowly beat in the confectioners' sugar, a cup at a time, until you have a sticky dough. Reserve 1 cup of powdered sugar for kneading. The dough will be very stiff.
Rub your hands thoroughly with butter, and begin kneading the sticky dough. As you knead, the dough will become workable and pliable. Turn the dough out onto a working surface dusted with powdered sugar and continue kneading until the fondant is smooth and no longer sticky to the touch, 5 to 10 minutes.
Form the fondant into a ball, wrap it tightly in plastic wrap, and refrigerate overnight. To use, allow the fondant to come to room temperature, and roll it out onto a flat surface dusted with confectioners' sugar.
--From All Recipes, submitted by Kiele Briscoe