Melt the butter in a large skilet over medium-high heat. Cook the onion in the butter until it browns slightly, about 5 minutes. Layer the squash slices into the skillet and sprinkle with the salt and pepper.
Cover the pan, reduce the heat to low, and cook the squash for 20 minutes, or until tender. Remove the cover. Stir the squash and continue cooking until the liquid has cooked out, another 3 or 4 minutes.