Place the marshmallows on a sheet pan in an even layer. Broil for 1 to 2 minutes, watching closely, until they are golden brown.
Transfer the toasted marshmallows to a medium saucepan with the water and sugar. Bring the mixture to a simmer over medium heat and cook, stirring occasionally, until the marshmallows are fully melted and the sugar is dissolved, about 5 to 7 minutes.
Remove from heat and stir in the vanilla extract. Let the syrup cool completely.
Transfer to an airtight container for storage.
Notes
Toast marshmallows until deep golden brown for the best flavor. If they’re too light, the syrup will taste more like plain vanilla than toasted marshmallow.
Stir the syrup occasionally while it simmers to help everything melt evenly and prevent sticking.
Add 1/2 to 1 teaspoon of corn syrup while cooking if you want to help prevent crystallization as it cools.
Store in an airtight container in the refrigerator for up to two weeks.
Add 1 to 2 tablespoons to coffee, lattes, chai tea, or dirty sodas when serving.
Mini marshmallows melt faster and more evenly, but regular marshmallows can be used if needed.
Brown sugar can be used instead of granulated sugar for a deeper, slightly molasses flavor.
Use 1 teaspoon of vanilla bean paste instead of vanilla extract if that’s what you have on hand.
Marshmallows can be toasted under the broiler, with a kitchen torch, or over an open flame. If using an open flame, strain the syrup before storing to remove any charred bits.