Ghee is Indian clarified butter.
Traditional clarified butter and ghee are very similar (and can be used interchangeably for the most part)–check back tomorrow for a recipe using it!), but there is one crucial difference between the two.

Unlike clarified butter, which is cooked just to the point where the water evaporates and the milk solids separate (and sink), ghee is cooked until the milk solids begin to caramelize.