In a pan with a lid, melt 3 tablespoons of butter over medium heat and sauté the onions until wilted, about 5 minutes.
Add the yellow squash and cook them until they are juicy, for about 5 more minutes.
Add the water and cook covered for 8 more minutes.
Turn off the heat and with the help of an immersion blender, blend it until it gets a creamy consistency.
Add the last tablespoon of butter and stir until it’s dissolved.
Salt to taste.