In a saucepan over medium heat, combine sugar and water. Bring to a boil, and stir until sugar is dissolved. Add peanuts, and cook stirring, over medium heat until peanuts are evenly coated, and no syrup is left in pan. Spread nuts out on a baking sheet.
Bake in preheated oven for 20 minutes, stirring every 5 minutes to evenly roast peanuts.