There’s something about vintage peanut butter butterscotch marshmallow squares that just feels like home. Maybe it’s the buttery sweetness of the butterscotch chips or the colorful surprise of soft rainbow marshmallows tucked inside. Either way, these no-bake bars taste like something straight out of Grandma’s handwritten recipe box, the kind of treat that appeared at every church potluck, Christmas tray, or cozy family gathering.
This recipe takes just minutes to make, uses only five simple ingredients, and stores beautifully in the fridge or freezer. Perfect for holidays, bake sales, or those days when you just want a little something sweet without turning on the oven.

Why You’ll Love This Recipe
- It’s quick and foolproof: This is one of those classic recipes that’s nearly impossible to mess up. A few minutes of melting and mixing, and you’ve got a whole pan of chewy, creamy bars ready to chill.
- No-bake convenience: Perfect for busy holiday baking seasons when your oven is already full.
- Classic flavor combination: The creamy peanut butter balances the caramel-like butterscotch for a nostalgic, buttery sweetness that’s both rich and comforting.
- Beautiful presentation: The rainbow marshmallows give these bars a fun pop of color, perfect for dessert trays, kids’ parties, or as a cheerful sweet to share with neighbors.
- Great for freezing or gifting: These squares keep their flavor and texture beautifully in the freezer, making them an ideal make-ahead treat for the holidays.

Ingredients
Variations & Add-Ins
- Chocolate lovers: Swap half the butterscotch chips for semi-sweet chocolate chips for a deeper flavor.
- Nutty crunch: Add ½ cup of chopped peanuts or Rice Krispies for a little texture.
- Holiday version: Use red and green mini marshmallows for Christmas, pastel ones for Easter, or orange and yellow for fall gatherings.
- Salted twist: Sprinkle a bit of flaky sea salt on top before chilling, it balances the sweetness beautifully.
- Extra creamy: Stir in a handful of white chocolate chips for a melt-in-your-mouth finish.

Recipe Tips
Cool before adding marshmallows: If the mixture is too hot, the marshmallows will melt into the peanut butter base instead of staying whole. You’re looking for warm, not hot, you should be able to touch it without it being too hot.
Chill marshmallows: Before you begin, pop the bag of marshmallows into the freezer, this helps them keep their shape while you fold them into the warm peanut butter/butterscotch mixture.
Use low heat: Butterscotch chips can scorch easily. Keep your burner low and stir constantly until melted.
Don’t skip the parchment paper: It makes lifting and cutting the squares so much easier (plus, cleanup is a breeze).
Fresh is best: If your marshmallows are stale or dry, they won’t mix evenly. Always use a fresh bag for soft, pillowy bites.
Set completely before slicing: These bars cut best once fully chilled and firm. If you try to slice too soon, they can be sticky or misshapen.
Storage tip: Keep the squares refrigerated in an airtight container with parchment between layers. They’ll stay fresh for up to 7 days or can be frozen for up to 3 months.

Instructions
- Chill marshmallows: Before you begin, pop the bag of marshmallows into the freezer, this helps them keep their shape while you fold them into the warm peanut butter/butterscotch mixture.
- Melt the base: In a large saucepan, melt the butter, peanut butter, and butterscotch chips over low heat. Stir constantly until everything is smooth and silky.
- Let it cool: Remove from heat and allow the mixture to cool for about 5 minutes. This step is important, if it’s too hot, it’ll melt the marshmallows completely.
- Stir in the vanilla: Once slightly cooled, add the vanilla extract and mix well.
- Add the marshmallows: Gently fold in the marshmallows until they’re evenly coated. Don’t overmix, you want the marshmallows to stay whole and colorful.
- Press into pan: Line an 8×8 or 9×9-inch baking dish with parchment paper for easy removal. Press the mixture in evenly and smooth the top with a spatula.
- Chill: Refrigerate for at least 2 hours, or until set.
- Slice & enjoy: Lift out of the pan, cut into squares, and serve chilled.

Freezing & Storage
Room temperature: If your kitchen is cool (around 18–20°C / 65–68°F), you can leave them at room temperature for up to 2 days in an airtight container. But since they contain butter and peanut butter, I usually recommend keeping them chilled for the best texture.
Refrigerator: Place squares in an airtight container. Separate layers with parchment or wax paper to prevent sticking. Store for up to 7 days in the fridge. Before serving, let them sit at room temperature for about 10–15 minutes to soften slightly, they taste best when just cool, not cold.
To freeze the whole batch: Line your pan with parchment paper before pressing in the mixture. Once chilled and set, lift the whole slab out of the pan. Wrap tightly in plastic wrap, then again in foil or place in a freezer-safe bag. Label and freeze for up to 3 months.
To freeze individual squares: Cut into squares and place them on a baking sheet lined with parchment. Freeze for about 1 hour until firm (this prevents them from sticking together). Once frozen, transfer to an airtight container or freezer bag with parchment between layers. Store up to 3 months.
How to Thaw: Remove from the freezer and place in the fridge overnight. For a quicker thaw, leave at room temperature for about 30–45 minutes. Avoid microwaving, it can cause the marshmallows to melt and the texture to turn greasy.
FAQ
Join the List
Want More Simple Recipes & Seasonal Inspiration?
Get cozy, from-scratch recipes, seasonal homesteading tips, and simple living inspiration delivered straight to your inbox.
Similar Recipes

Vintage Peanut Butter Butterscotch Marshmallow Squares
Equipment
- Medium saucepan
- Rubber spatula
- Parchment Paper
- 8×8 or 9×9-inch baking dish
Ingredients
- 1 package butterscotch chips
- 1 cup creamy peanut butter
- ½ cup butter
- 1 package rainbow miniature marshmallows
- 1 tsp vanilla extract
Instructions
- Melt the base: In a large saucepan over low heat, melt the butter, peanut butter, and butterscotch chips together. Stir constantly until smooth and creamy.
- Cool the mixture: Remove from heat and let cool for 5–10 minutes. This helps prevent the marshmallows from melting when you add them.
- Add vanilla: Stir in the vanilla extract and mix well.
- Fold in the marshmallows: Gently stir the marshmallows into the cooled mixture until evenly coated.
- Press into pan: Line an 8×8 or 9×9-inch baking dish with parchment paper. Press the mixture in evenly and smooth the top with a spatula.
- Chill: Place in the refrigerator for at least 2 hours, or until firm.
- Slice and serve: Once set, lift out using the parchment paper, cut into squares, and serve chilled.
Notes
- Cool the mixture before adding marshmallows to keep them intact and colorful.
- Use low heat to prevent scorching the butterscotch chips.
- Fresh marshmallows work best, old ones may clump or harden.
- Refrigerate before cutting for clean, firm squares.
- Store in the fridge for the perfect chewy texture.
