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Step 1
In a large bowl, cream butter and sugar until light and fluffy, 5-7 minutes. Beat in vanilla. Gradually beat flour into creamed mixture. Stir in coconut.
Step 2
Using a sheet of waxed paper, shape dough into a 12x3x1-in. rectangle. Wrap in waxed paper; refrigerate 3 hours or overnight.
Step 3
Preheat oven to 300°. Unwrap and cut dough crosswise into 1/4-in. slices. Place 1 in. apart on ungreased baking sheets. Bake until edges are light golden, 18-20 minutes. Cool on pans 5 minutes. Remove to wire racks to cool.