Combine butter, peanut butter, and chocolate chips in a microwave-safe bowl. Heat in 30-second bursts, stirring after each, until smooth and glossy.

Place the Chex cereal in a very large mixing bowl. Pour the melted mixture over it and gently fold with a spatula until every piece is evenly coated.

For easier handling, work in batches. Add one-third of the powdered sugar (about 1.5 cups) to a gallon-size Ziploc bag, then one-third of the coated cereal. Seal and shake gently until dusted. Pour into your serving bowl and repeat. (Pro tip: A 1½-gallon or larger Ziploc bag can often handle it all at once!)

Spread on baking sheets to cool if needed, then store in an airtight container.