Place popcorn and peanuts in a large bowl. In a large microwave-safe bowl, heat marshmallows and butter on high for 2 to 2-1/2 minutes or until melted; stir in gelatin powder until dissolved. Pour over popcorn mixture and toss to coat.
With lightly buttered hands, quickly shape mixture into twelve 2-1/2-in. balls. Let stand at room temperature until firm before wrapping in plastic wrap.