Homemade Rainbow Chip Frosting

Learn how to make homemade rainbow chip frosting. This from scratch frosting tastes even better than the real deal, without additives or preservatives. It’s not as cloyingly sweet and you can have fun customizing the colors of the rainbow chips! Use it to frost cupcakes, cakes, and more. 

rainbow chip frosting in a glass bowl

Not sure if you’ve ever had the pleasure of experiencing the tub of miracles otherwise known as rainbow chip frosting. It’s a tangy-sweet, but mostly sweet, vanilla frosting that has soft and colorful chips swirled inside. If unicorns and leprechauns owned a bakery together, rainbow chip frosting is what they would sell. But in real life, it’s sold in the baking aisle, so let’s make our own at home!

sheet cake in a glass pan with rainbow chip frosting spread on top

This Rainbow Chip Frosting Is

  • Fun to make
  • Infinitely better than the canned version
  • Silky smooth with festive rainbow chips
  • Sweet and a little tangy
  • Completely homemade– rainbow chips and all
  • Perfect for birthdays
  • A party in frosting form!

chopped white chocolate in a glass measuring cup

Overview: How to Make Rainbow Chip Frosting

For the full recipe, scroll to the bottom of this post.

  1. Melt the white chocolate. Use a double boiler or microwave. I recommend Baker’s or Ghirardelli brands of white chocolate. They’re sold in bars in the baking aisle, typically right next to the chocolate chips.
  2. Add color. Pour the melted white chocolate into 4 bowls. Add 2-3 drops of food coloring to each. I like to use Americolor gel food coloring (affiliate link). Don’t use too much food coloring– this can cause your white chocolate to seize up.
  3. Spread the chocolate onto baking sheets. Line each baking sheet with a silicone baking mat or parchment paper. Refrigerate for 15 minutes.
  4. Make the frosting base. Beat the butter and cream cheese together until completely smooth and creamy. Add the confectioners’ sugar, then vanilla extract and salt. Set aside.
  5. Chop the white chocolate into “chips.” Remove the white chocolate from the refrigerator, place white chocolate rectangles on a cutting board, and chop it up into tiny squares or pieces. Fold a big handful of chips into the frosting using a rubber spatula. You’ll have a few chips leftover– great for decorating the cake/cupcakes/whatever you’re making!

melted white chocolate in bowls tinted blue, yellow, red, and green

You can use any color you like, but stick with just 4 because you won’t have enough white chocolate for more.

2 images of colored white chocolate on a silpat baking mat and colored chocolate chopped into chunks

Spread the colors out onto a silicone baking mat or parchment paper, refrigerate for about 15 minutes until solid, then cut into little tiny pieces.

rainbow chip frosting before rainbow chips are added

rainbow chips added to frosting in a glass bowl

What Tastes Best with Rainbow Chip Frosting?

Pictured in these photos is my yellow sheet cake baked in a 9×13 pan. Takes 40 minutes in that size pan if you want to try it yourself.

sheet cake in a glass pan with rainbow chip frosting spread on top

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rainbow chip frosting in a glass bowl

Homemade Rainbow Chip Frosting

  • Author: Sally
  • Prep Time: 35 minutes
  • Cook Time: 0 minutes
  • Total Time: 35 minutes
  • Yield: 2 and 1/2 cups
  • Category: Frosting
  • Method: No Bake
  • Cuisine: American


Homemade sweet and creamy rainbow chip frosting tastes even better than the real deal!


  • 6 ounces (170g) pure white chocolate, coarsely chopped*
  • food coloring: red, green, yellow, blue
  • 3/4 cup (1.5 sticks or 172g) unsalted butter, softened to room temperature
  • 6 ounces (170g) brick cream cheese, softened to room temperature
  • 3 and 1/2 cups (420g) confectioners’ sugar
  • 1 and 1/2 teaspoons pure vanilla extract
  • salt, to taste


  1. Melt the white chocolate. Use a double boiler or microwave. If using the microwave, stop and stir the white chocolate every 20 seconds to help avoid seizing. Pour the white chocolate into 4 small bowls and stir in 2-3 drops of coloring to each. Don’t use too much food coloring, as your white chocolate will seize up. Spread chocolate out onto a silicone baking mat (recommended) or parchment paper-lined baking sheet. You’ll have 4 rectangles. Refrigerate for 15 minutes.
  2. Meanwhile, get started on the frosting base. In a large bowl using a handheld or stand mixer fitted with a whisk attachment, beat the butter and cream cheese together on high speed until completely smooth and creamy, about 3 minutes. Add the confectioners’ sugar 1 cup at a time, beating on low at first then increasing to high speed. Once incorporated, add the next cup. Once creamy and combined, beat in vanilla extract. Taste. Add a pinch of salt if you’d like. Set aside for a moment.
  3. Remove white chocolate from the refrigerator. The rectangles should peel easily off the silicone baking mat. Chop up into tiny squares or pieces. Fold a big handful of chips into the frosting using a rubber spatula. Add more if desired. You’ll have a few chips leftover. (Would be great for decorating the top of the cake/cupcakes/whatever you’re making!)
  4. Store any leftover frosting or chips in the refrigerator.


  1. Make Ahead Instructions: You can make this frosting 1 day before you need it. Keep it covered tightly in the refrigerator until ready to use.
  2. White Chocolate: I recommend Baker’s or Ghirardelli brands. They’re sold in bars in the baking aisle, typically right next to the chocolate chips.
  3. Adapted from Not Without Salt.

Keywords: rainbow chip frosting


  1. Sally,

    I just made your cream cheese sugar cookies yesterday which are to die for!!! I have a feeling this frosting would be soooo good on them! Do you think a little almond extract in the frosting would taste good?

    1. UMMMM YES!!! Maybe start with 1/4 teaspoon almond extract. Then taste and beat in more if you’d like. That stuff is strong!

  2. I couldn’ t wait to make this frosting after seeing it posted on your site early Mon morning. I baked your yellow sheet cake (our absolute favorite) and frosted it with this frosting. Despite only having red food coloring, I made only pink rainbow chips(I guess that doesn’t qualify for rainbow!!), but this frosting was a real winner!! We absolutely Loved this!! 

  3. Hi Sally! Do you think this recipe would be enough for your funfetti layer cake or would I need to double the recipe? Thanks!

    1. I don’t think so. I would actually 1.5x it. I fear doubling would be too much, but if you’re OK with frosting leftovers– that’s ok too! I wouldn’t double or 1.5x the white chocolate rainbow chips though. The recipe as written will be plenty.

  4. Caitlin Collier says:

    Hi Sally!
    Since discovering this recipe a couple of months ago
    I have made this too many times to count! I actually bought the canned rainbow chip frosting to compare. Your recipe is leaps and bounds ahead of the canned stuff! As delicious as I remember it tasting as a kid, yours is no comparison! The frosting is so fluffy and has just enough sugar. Melting and coloring the chocolate takes only minutes and it cools while you prepare the frosting. We love this recipe served on top of your yellow sheet cake (made in a 9×13) with sprinkles added to the batter. We have dubbed this recipe as “rainbow cake”. Thank you for making our tongues slap our brains out with this one!

  5. Do you think you can put these chips into cake batter? I assume the chocolate would melt, but I feel like the matching cake mix to this frosting doesn’t have just regular sprinkles in it. Maybe I could mix in just a few into the sprinkles  to supplement?

    1. Absolutely! They will slightly melt into the cake batter, I assume, so adding some sprinkles in there as well would help.

  6. Do you think this would work okay on a layer cake, or would it be too hard to spread it nicely because of the chips? Also, do you think I’d need to double the recipe if I was making a three-layer cake?

    1. Hi Allix! I would 1.5x the recipe for a 3 layer cake. Shouldn’t be too difficult to spread!

  7. Hello! Do you think the chips would keep if made 2-3 days in advance of making the frosting?

    1. Yes, just keep them in a cool place where they won’t melt 🙂

  8. This recipe is frosting perfection! So fluffy and delicious. The addition of the cream cheese tempers down the sweetness. I used the colored candy melts and they worked just fine. Thanks for this!

  9. This frosting was fantastic! I made it with mascarpone instead of cream cheese (I live in the UK where we don’t have brick cream cheese, only the soft spreadable kind which does not hold up well in frosting), and the mascarpone worked perfectly- it had a light, fluffy consistency and holds up very well. The flavour was also fantastic- I definitely plan to make it again. I piped the rainbow chips to make them more chip-shaped which ended up taking a VERY long time- next time I will do it the way you suggest with chopping the chocolate instead, that’s a very clever idea! Thanks for the recipe 🙂

  10. Hi Sally! I adore this recipe but recently mine has been coming out grainy. I always weigh ingredients, made sure butter and cream cheese were room temp, sifted the sugar and followed directions exactly. The sugar just won’t fully dissolve for some reason! The cream cheese was Philadelphia brand. I tried making it three times with different powdered sugars and it didn’t change. Adding a bit of liquid didn’t seem to help either. Any suggestions?

    1. Hi Robin! That’s so odd! I wonder if the powdered sugar is just old? Though you mention you used different bags of it. Perhaps try a new brand? Sifting definitely helps. You can sift a few times for extra insurance, too.

  11. Ohhhh thank you so much for this! I am a die hard rainbow chip lover. I am from Canada, and as far as I know, I think it is still discontinued, I’d have to check my sources. However when we make it to the states, that is my first stop…. icing, pop tarts (yous guys south of the border have way more flavours) and yogurt (same reason). However my childhood memories were rainbow bit cake with rainbow chip icing. Matchy matchy! I’m not a cake lover, but when that was pulled out with candles a blazin’ I was in birthday heaven. I was so disappointed when it was taken off the shelves and on top of it they tried to replace it with a knockoff sprinkles version. Blugh! You’re absolutely right it’s all in the consistency of the creamy chocolate chip. Cant wait to try this.

  12. Hi Sally! Love your recipes. Do you think this frosting could be made using your Swiss meringue buttercream as the base and adding the chips? My family is obsessed with your SMBC and always wants it for birthdays. Thanks!

    1. Absolutely! Swiss meringue buttercream with these fun chips would be delicious. Fold them in after the buttercream is finished (after you add the vanilla).

  13. Could you make this frosting with just a plain butter base and not cream cheese?

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