Preheat the oven to 350 F. In a large bowl, combine butter with powdered sugar until fluffy.
Add in the vanilla extract and mix until smooth. Add in the flour, mix until it is fully combined. Fold in the crushed Oreo cookies. Roll the cookie dough into balls, and place them onto a large ungreased baking sheet.
Bake for 10-12 minutes. Place the remaining 1/2 cup powdered sugar into a shallow dish. Roll the cookies into the powdered sugar.