Clarified butter is butter from which all milk solids have been removed. The result is a clear, yellow butter that can be heated to higher temperatures before burning.
Typically, it is produced by melting butter and allowing the components to separate by density. The water evaporates, some solids (i.e. whey proteins) float to the surface and are skimmed off, and the remainder of the milk solids (casein) sink to the bottom and are left behind when the butterfat on top is poured off. It can also be separated with a separatory funnel or a gravy fat separator. This butterfat is the clarified butter.
Commercial methods of production also include direct evaporation, but may also be accomplished by decantation and centrifugation followed by vacuum drying; or direct from cream by breaking the emulsion followed by centrifugation.