Combine water and sugar in a saucepan. Bring to a boil, and stir until sugar is dissolved, to make a syrup.
Add peanuts. Continue to cook over medium heat, stirring regularly, until peanuts are evenly coated, and no syrup is left in pan.
Spread nuts out on baking sheets. Bake at 300 degrees F for about thirty minutes to one hour or until sugar is completely dried. Gently stir the peanuts a few times while baking. Remove from oven and place on paper towels, let cool, and store in airtight containers.