Gather all ingredients.

Heat sweetened condensed milk and peanut butter in a heavy saucepan over medium heat, stirring constantly, until just bubbly.

Remove from heat. Stir in white chocolate until smooth. Immediately stir in peanuts and vanilla.

Spread evenly into wax paper lined 8-or 9-inch square pan. Cool.

Cover and chill for 2 hours or until firm.

Turn fudge onto a cutting board; peel off paper. Cut into squares. Store leftovers covered in refrigerator.