Place the apples, water, lemon juice, brown sugar, vanilla, cinnamon, and nutmeg to the inner pot of your Instant Pot. Stir well to combine.
Secure the lid and seal the valve. Cook on Manual High for 6 minutes, then allow a full natural release. Carefully remove the lid.
Using an immersion blender (or pulse batches in a regular blender), blend the contents until smooth. Taste and add more sweetener if desired.
Press SAUTE LESS on the InstantPot. Bring the mixture to a simmer, and allow it to cook for 30-60 minutes, stirring occasionally, until the apple butter has thickened and darkened to your desired consistency.
Press CANCEL on the Instant Pot, then allow the apple butter to cool completely.
Transfer the apple butter to a large mason jar and store it in the refrigerator for up to 3 weeks. You can also freeze it for up to 6 months.