Peanut Butter Fudge Recipe With Powdered Sugar: Melt-in-Your-Mouth Sweetness

This fudge changed my holiday dessert game forever. David still requests it every Christmas, and I’ve tested it on at least five different stovetops to get it just right.

What makes this version special is the simplicity—no candy thermometer, no complicated steps, just a foolproof method that works every time. The powdered sugar creates that signature melt-in-your-mouth texture we all love.

You’ll end up with a batch of rich, creamy fudge that’s smooth as silk and packed with peanut butter flavor. It sets up perfectly in the pan, ready to cut into squares.

Perfect for gifting, holiday platters, or sneaking a piece when no one’s looking. Here’s how to make it.

Ingredients for Peanut Butter Fudge Recipe with Powder Sugar

Eight simple ingredients for that signature melt-in-your-mouth fudge everyone loves.

The peanut butter is the star here. Jif or Skippy creamy work perfectly—just avoid natural styles with oil separation. I grab mine at Walmart or Target during holiday sales. The powdered sugar needs to be fresh (check for clumps). Domino or C&H brands are reliable. Butter quality matters less for melting, but unsalted lets you control the salt level.

No powdered sugar? Pulse granulated in a blender until fine (you’ll need about 30% more volume). Out of marshmallows? Corn syrup at one-third the amount works in a pinch, though texture differs slightly. For nut allergies, swap peanut butter for sunflower seed butter. The milk can be any percentage—whole adds richness (and I always have it on hand).

This keeps beautifully at room temp for up to 2 weeks in an airtight container. Freeze for 3 months if making ahead. Cut into squares once fully set—don’t rush it (worth the wait).

Step-by-Step Instructions for Peanut Butter Fudge

Here’s how to create that signature melt-in-your-mouth texture with ease.

Step 1: Melt Butter and Prepare Base

In a large saucepan, melt the 0.5 cup Unsalted Butter over medium heat. I like to cut the butter into small pieces first so it melts evenly without burning. Watch for the butter to completely liquefy and just start to foam—this takes about 2-3 minutes.

Once melted, immediately add the 1.5 cups Creamy Peanut Butter and stir until fully combined into a smooth mixture. The peanut butter should blend seamlessly with the butter, creating a glossy, golden base. Remove from heat if it starts to bubble too vigorously.

Step 2: Incorporate Sweeteners and Marshmallows

Stir in the 4 cups Powdered Sugar gradually, about 1 cup at a time, mixing well after each addition. This prevents clumping and ensures a smooth consistency. The mixture will become thick and crumbly—this is normal.

Next, add the 2 cups Mini Marshmallows and 0.5 cup Granulated Sugar. Return the pan to low heat and stir constantly for 3-4 minutes until the marshmallows are completely melted and the mixture is smooth. You’ll notice it becomes glossy and starts to pull away from the sides of the pan.

Step 3: Add Final Liquid Ingredients

Remove the pan from heat and stir in the 0.25 cup Whole Milk and 2 tsp Vanilla Extract. The milk will loosen the mixture slightly, making it easier to work with. I always use pure vanilla extract here—the flavor difference is noticeable in such a simple recipe.

Finally, add the 0.25 tsp Salt and stir until fully incorporated. The salt might seem like a small amount, but it balances the sweetness perfectly. Taste the mixture now—it should be rich, sweet, and slightly salty with a prominent peanut butter flavor.

Step 4: Set and Cool the Fudge

Line a 8×8-inch baking dish with parchment paper, leaving some overhang on the sides for easy removal. Pour the fudge mixture into the prepared dish and spread it evenly with a spatula. The top should be smooth and glossy.

Let it cool at room temperature for 1 hour, then transfer to the refrigerator to set completely for at least 2 hours. The fudge is ready when it’s firm to the touch and holds its shape when cut. Resist the temptation to sample it early—it needs this time to achieve that perfect melt-in-your-mouth texture.

Step 5: Cut and Serve

Once fully set, use the parchment overhang to lift the fudge from the dish. Place it on a cutting board and use a sharp knife to cut into 1-inch squares. For clean cuts, dip the knife in hot water and wipe it between each slice.

Store the fudge in an airtight container at room temperature for up to 1 week, or in the refrigerator for up to 2 weeks. Each piece should be rich, creamy, and melt effortlessly on your tongue with that perfect balance of sweetness and peanut butter flavor.

Health Benefits of This Recipe

Protein Powerhouse

Peanut butter delivers 7g of protein per 2-tbsp serving, making this fudge a sneaky way to add plant-based protein to your diet. It’s perfect for a post-workout treat or an afternoon pick-me-up when you need sustained energy. David swears by it for his 3pm slump. 💪

Healthy Fats Boost

Peanuts contain heart-healthy monounsaturated fats that support cardiovascular health. The 1.5 cups peanut butter in this recipe provides a good dose of these beneficial fats, which can help lower bad cholesterol levels when part of a balanced diet.

Energy-Rich Treat

This fudge packs quick energy from natural sugars and healthy fats. The powdered sugar and marshmallows provide fast-acting carbohydrates, while peanut butter offers longer-lasting fuel. It’s my go-to for hiking trips with the kids in Austin’s greenbelt. ✨

Vitamin and Mineral Source

Peanuts are rich in vitamin E, magnesium, and niacin. One serving of this fudge contributes to your daily needs of these essential nutrients, which support immune function, muscle health, and energy metabolism.

Antioxidant Benefits

Peanuts contain resveratrol and other antioxidants that help combat oxidative stress. While this is a treat, the peanut butter base gives it more nutritional value than traditional fudge recipes.

Frequently Asked Questions