1 (16 ounce) package miniature marshmallows
4 tablespoons water
1 teaspoon Gluten Free vanilla extract
2 pounds confectioners' sugar, divided
Place the marshmallows in a large microwave-safe bowl, and microwave on High for 30 seconds to 1 minute, melting the marshmallows but not scorching them. Carefully put the melted marshmallows into a greased stand mixer bowl. Stir the water and vanilla extract into the hot marshmallows until smooth. Beat in the sugar slowly, one cup at a time, until you have a stiff, sticky dough. Reserve 1 cup of powdered sugar for kneading.
Coat your hands with powdered sugar and begin kneading the sticky dough. As you knead, the dough will become pliable. Dust a working surface with confectioners' sugar and continue kneading until the fondant is smooth and no longer sticky to the touch.
Form a ball with the fondant, wrap tightly in plastic wrap, and refrigerate overnight. To use, allow the fondant to come to room temperature, and roll it out onto a flat surface dusted with confectioners' sugar. If you plan to use food coloring, incorporate it now by dropping color onto the fondant and using additional kneading.
After rolling the fondant to desired thickness, lay over cake or cookies, press with designs or cut for stripes. If applying to smaller baked goods, you may want to use a bit of corn syrup on the underside of the fondant to help it stick.