In a large heavy non-stick skillet cook cabbage in oil over moderate heat, stirring, until wilted slightly, about 5 minutes. Add fennel and cook, stirring until just tender, about 5 minutes. Stir in water, vinegar, sugar, and salt and pepper to taste and cook, over moderately low heat, covered, stirring occasionally, until vegetables are tender and liquid is almost evaporated, 10 to 15 minutes.
Serve cabbage and fennel hot or at room temperature.
Recipe courtesy of Gourmet Magazine