Place butter in a medium heavy bottomed saucepan on medium heat.
Simmer till butter is melted. Reduce heat to low and give the melted butter a stir. Let it simmer slowly for 20-30 minutes ensuring that the heat is low enough for it to not start burning.
Using a netted skimmer, skim the foamy bits off the top of the liquid (these are the milk solids separating from the liquid and burning off). Check from time to time (every 5 minutes) and skim the foam from the top.
At the end of 30 minutes, you will have a reasonably clear golden liquid. You will see a solid brown (beehive patterned) residue at the bottom of the pan.
Remove pan from heat. Cool for 10 minutes.
Strain hot liquid carefully in a glass jar and allow it to cool completely before covering with a lid.
Ghee will keep at room temperature for up to 3-4 weeks.