In a heavy, preferably light-colored skillet, melt butter over medium-low heat. The melted butter will sputter gently as the moisture boils out of it, and the bubbles will change from large to fine and foamy.
Once the foam appears, push it aside every few seconds to see if the milk solids have settled to the bottom of the pan. When this sediment appears golden brown, remove it from the heat. Do not let it turn dark brown.
Cool ghee for a minute or two, then pour the liquid into a container with a tight-fitting lid, leaving most of the solids behind. Cool it completely, cover, and store at room temperature for 1 month or in the refrigerator for 3 months.
Ghee turns to a solid as it cools, so bring it to room temperature before using, or melt it by placing the jar in which it is stored in hot water.