Combine sugar, instant coffee, and water in a pot.

Bring the mixture to a boil over medium-high heat.

Reduce the heat to low and simmer for 1 hour, stirring occasionally to prevent burning.

Remove from heat and allow to cool to room temperature.

Once cooled, add vanilla extract and vodka.

Stir to combine all ingredients thoroughly.

Pour the Kahlua into a clean bottle or jar for storage.

Seal tightly and store at room temperature. It has a long shelf life.