To make ghee, gently melt the butter in a saucepan over medium-low heat. After melting, the butter will separate into three layers. This should only take a few minutes. Foam will appear on the top layer, the milk solids will migrate to the bottom of the pan, and clarified butter will float between the two.
Let the butter come to a simmer and hold it here until the middle layer becomes fragrant, more golden than when you started, and clear - push the solids on top out of the way to have a peek. The milk solids at the bottom will begin to brown. At this point it is a matter of preference, you can let the solids lightly brown, or let things progress a bit further.
When the ghee is finished, skim absolutely all of the top layer of foam into a bowl with a spoon or strainer, turn off the heat, and allow things to settle for a minute or so. Next, carefully pour the golden central layer through a strainer, into a clean glass jar, leaving the milk solids at the bottom of the pan.
If you were able to get all the solids out, and use clean and dry utensils in the jar, ghee will keep at room temperature for weeks. It can be used as a cooking oil, finishing element, and is also a traditional body moisturizer and massage medium :). Enjoy!