Add the granulated sugar, water, powdered peanut butter, and salt to a medium saucepan.
Whisk until combined, then bring the mixture to a gentle simmer over medium heat.
Simmer for about 10 minutes, keeping an eye on the syrup so it doesn't bubble over.
Pour the syrup through a fine mesh strainer into a heat-safe container.
This removes any tiny peanut butter particles and creates a silky smooth syrup.
While the syrup is still warm, stir in the vanilla extract.
Allow the syrup to cool completely before transferring it to a bottle.
Store in the refrigerator for up to 3 weeks.
Before using, give the bottle a quick shake, and then use in any recipe of choice.