Preheat oven to 350 degrees F (175 degrees C). Spread melted butter in a 2-quart baking dish.
Heat peaches, 2/3 cup sugar, and water in a saucepan over medium-high heat, stirring occasional, until slightly thickened, about 5 minutes; remove from heat.
Mix flour, 1 cup sugar, milk, baking powder, and salt in a bowl until batter is combined; pour over melted butter in baking dish. Arrange peaches over the batter and pour any remaining liquid on top.
Bake in preheated oven until golden brown, 40 to 45 minutes.
