Pour cereal into a large bowl.
In a microwavable bowl, microwave chocolate chips, peanut butter, and butter on High for 1 minute; stir.
Microwave another 30 seconds until smooth; stir in vanilla.
Pour mixture over cereal, stir until evenly coated.
Transfer to a 2-gallon resealable plastic bag.
Add powdered sugar, seal and shake until coated.
Spread on wax paper to cool.
Store in an airtight container in refrigerator.
