Clarified butter is a form of butter which has had the water and milk solids removed, leaving only the liquid fats. Clarified butter is used in cooking when the flavor of butter is desired, but the cooking requires a temperature above that at which milk solids burn. Additionally, since clarified butter does not contain lactose, it can be used for those who are lactose intolerant.
Clarified butter is made by slowly melting butter, which causes the water to evaporate, the whey proteins to move to the top, and the casein particles to move to the bottom. The middle, liquid layer is the clarified butter.