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Put bag of marshmallows in the freezer and line an 8×8 pan with parchment paper.
Melt butterscotch chips, peanut butter, and butter in a medium saucepan over low heat, stirring until smooth. Remove from heat, and let cool to ensure the marshmallows don't melt in next step.
Quickly fold in vanilla and marshmallows.
Spread mixture into 8×8 or 9x9 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 refrigerator or freezer.