Microwave butter and peanut butter for 2 minutes on high. Stir and microwave on high for 2 more minutes.
Add vanilla and powdered sugar to peanut butter mixture and stir to combine with a wooden spoon.
Pour into a buttered 8 by 8-inch pan lined with waxed paper. Place a second piece of waxed paper on the surface of the fudge and refrigerate until cool.
Cut into 1-inch pieces and store in an airtight container for up to a week.