Place the butter in a large heat-proof jar such as a Mason jar. Cover with a layer of cheesecloth and attach with a rubber band. Place the jar in the middle of a heavy skillet –cast iron or carbon steel is ideal. Place the skillet over low heat.
Alternatively, place the butter in a 2-quart light-colored stainless-steel saucepan. Cover the pot with a small, overturned fine-mesh sieve that fits over the saucepan to catch any splatters. Place over low heat as directed.
At first the butter will melt, then the water will begin to boil out, then the milk solids will aggregate, sink to the bottom, and brown. This entire process will take an hour to an hour and a half depending on the butter, the pan, the heat, etc.
When the liquid butter is clear and deep gold with tiny bubbles rising from the bottom, the ghee is done. Strain through a fine sieve, cool to room temp, then cover tightly to store on the counter or in the fridge. The brown bits on the bottom of the jar are also delicious. I usually enjoy them on ice cream.