Put a bag of marshmallows in the freezer and line an 8×8 pan with parchment paper.
Melt butterscotch chips, peanut butter, and butter over low heat, stirring until smooth. Remove from heat, and let cool to ensure the marshmallows don't melt in the next step.
Quickly fold in vanilla and marshmallows.
Spread mixture into 8×8 or 9×9 inch pan and gently spread with a spatula or spoon.
Refrigerate until firm. Approximately 1 hour.
Remove from pan and slice into squares. Store squares in the refrigerator.