Gather ingredients.

Mix brown and white sugar with the milk in large pot; bring mixture to a boil.

Stir in peanut butter, reduce heat to medium, and bring the mixture back to boil (stirring constantly).

Remove the pot from heat when a drop of the mixture forms a ball in a glass of cold water.

Stir margarine and vanilla into the mixture; stir vigorously until the fudge hardens. (Always stir in same direction.)

Pour fudge onto buttered plates or waxed paper.

Let cool and cut into 1-inch pieces.