Lightly coat an 8 inch square baking dish with cooking spray. Line with parchment paper, leaving a 1-inch overhang on all sides, then lightly coat parchment with spray. Cover paper with 1 1/4 cups peanuts.

In a medium pot, combine 1 tablespoon water, caramels and marshmallows over medium. Cook, stirring frequently, until caramels and marshmallows melt and mixture is smooth, about 8 minutes. Immediately pour over peanuts. Then top with remaining 1 cup peanuts Let cool until set, about 2 hours, then cut into 16 bars. (Store in an airtight container with parchment between the layers, up to 2 days.)