Gather all ingredients: softened cream cheese, unsalted butter, powdered sugar, all-purpose flour, and vanilla extract. Preheat the oven to 350°F (175°C).

In a large bowl, cream together the cream cheese and butter until light and fluffy, about 2-3 minutes. Gradually add the powdered sugar until fully combined.

Gently stir in the all-purpose flour and vanilla extract until just combined, being careful not to overmix.

Drop spoonfuls of cookie dough onto an ungreased baking sheet, spacing them about 2 inches apart.

Bake in the preheated oven for 12-15 minutes, until edges are lightly golden and centers remain soft.

Cool the cookies on the baking sheet for about 5 minutes before transferring to a wire rack to cool completely.

Dust cooled cookies with powdered sugar before serving. Enjoy with coffee, tea, or ice cream!