In a saucepan bring the sugar and water to a boil.
Once the syrup begins to caramelize, add in the peanuts, stirring constantly until the sugar reaches a smooth and even consistency with a brownish caramel color.
Remove from heat and spread mixture evenly on a greased pan about 4x8.
Allow to cool in the refrigerator for 1 hour.
When chilled, slice into small squares and serve.