Measure out 9 cups of Rice Chex cereal and place it in a large mixing bowl.
In a medium saucepan, combine chocolate chips, peanut butter, and butter.
Heat the mixture over low heat, stirring until fully melted and smooth.
Remove the saucepan from heat and stir in the vanilla extract.
Pour the melted chocolate mixture over the Rice Chex cereal.
Gently fold the cereal until evenly coated with the chocolate mixture.
Place 1 1/2 cups of powdered sugar into a large resealable plastic bag.
Add the chocolate-coated cereal to the bag, seal it, and shake until well coated.
Spread the muddy buddies onto a baking sheet lined with parchment paper.
Allow them to cool for about 30 minutes before serving.