Into large bowl, measure cereal; set aside.
In a microwavable bowl, microwave chocolate chips, peanut butter, and butter uncovered on High 1 minute; stir.
Microwave about 30 seconds longer or until mixture can be stirred smooth. Stir in vanilla.
Pour mixture over cereal - stir until evenly coated.
Place in a 2-gallon resealable plastic bag.
Add powdered sugar.
Seal the bag well and shake until well coated.
Spread on waxed paper to cool.
Store in an airtight container.