Put the butter in a medium heavy bottomed saucepan. Turn on medium heat until the butter melts.
Turn down heat to a low simmer. The butter will foam, sputter and pop for awhile and then begin to quiet down.
Do not cover the pot. The whole point is to evaporate the water off.
In 12-15 minutes, it will begin to smell like popcorn. White curds will begin to form on the bottom of the pot. When these curds turn a light tan color, the ghee is ready. There also can be a fine foam on the top making it difficult to see the bottom.
It is important to pay attention in this final phase because it happens quickly and ghee can burn very easily.
When ghee burns it caramelizes, has a nutty flavor and turns a light brown color. Burned ghee fine to eat, so if you burn it a little, don't worry!
Let ghee cool just until warm. You can skim off any remaining foam off the top to save to eat with hot rice, as this foam has medicinal properties.
Strain the warm ghee into a glass jar through a strainer, lined with a few layers of cheesecloth or thin, un-dyed cotton cloth.
Discard the curds at the bottom of the saucepan.