Place the marshmallows in a large microwave safe bowl.  Pour the water on top.  Microwave in 30 second intervals, stirring after each interval, until the marshmallows are completely melted.

Stir in half of the powdered sugar with a sturdy wooden or plastic spoon.  Continue to add the remaining powdered sugar until the dough is the consistency of play dough.  Then knead the dough with your hands until the fondant is smooth.

To dye the fondant, add a few drops of gel food coloring into a ball of fondant.   Wear gloves so that the food coloring doesn’t transfer to your skin and knead the food coloring until the dough until it’s evenly distributed.

Roll the dough out onto a counter dusted with powdered sugar.  Then the fondant is ready to use to cover your cake or cut out items for decorating your favorite desserts.