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Rinse cranberries, and remove any stems or blemished berries.
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Bring the water and sugar to a boil in a 3-quart saucepan over medium heat, stirring occasionally. Allow to boil for 5 minutes, stirring occasionally.
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Stir in the cranberries. Bring back to a boil, and stir occasionally. Continue boiling about 5 minutes longer, stirring occasionally, until cranberries begin to pop. Pour sauce into a serving bowl or container. Refrigerate about 3 hours or until cooled and set.