Chop butter into equal size pieces and place in a heavy bottomed skillet (or cast iron), dutch oven or a stainless steel skillet.
Melt the butter over medium heat, then immediately turn the temperature down to medium-low.
As the butter cooks, use a slotted spoon to skim the foam off the top and discard.
Continue skimming periodically until the top has become clear(should take about 20 minutes).
Once the top is clear, continue cooking until the milk solids in the bottom of the skillet have begun to brown and turn an amber color. This should take about 5-10 minutes.
Once the ghee is golden in color and smells nutty and a little like toffee, remove it from the heat. Allow it to cool for a couple minutes.
Place cheesecloth in a strainer over a bowl and carefully pour the ghee in to strain all the milk solids.
Transfer it to a glass jar with a lid and store in the pantry for up to 3 months, or in the fridge for up to a year.
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Notes
Be careful not to let the milk solids burn as it will give your ghee a bitter taste.
Always keep the termpature on low or medium-low to make sure the milk solids don't burn.
Use a coffee filter instead of cheesecloth to strain the ghee.