Measure out cereal into a large bowl and set aside. Coat a 13x9-inch pan with cooking spray or butter and set aside.
In large saucepan melt butter over low heat. Add marshmallows and stir until completely melted. Stir in vanilla. Remove from heat.
Add cereal. Stir until well coated. Let cool for several minutes. Stir in M&M's, very gently! They will have a tendency to melt. Pour them over the mixture as spread out as possible so you don't have to stir much.
Using wax paper press mixture evenly into prepared pan. Let cool for 15 minutes or until set.