PLACE cereal in large bowl.
MICROWAVE morsels and peanut butter in a medium, uncovered, microwave-safe bowl on MEDIUM-HIGH (70%) power for 1 minute; STIR. Morsels may retain some of their shape. If necessary, microwave at additional 10- to 15-second intervals, stirring until smooth. Pour over cereal; stir to coat well.
SPREAD mixture evenly in a buttered 13 x 9-inch pan. Refrigerate for about 1 hour or until firm. Cut into squares.