Place potatoes in a pot with water to cover. Bring to a boil, introduce butter, salt and pepper. Reduce heat to medium low and simmer until potatoes are tender, 10 to 20 minutes more.

Meanwhile, prepare gravy mix. Bring 3 1/2 cups of water to a boil in a large saucepan. Combine the remaining cup of water with the gravy mix and stir to dissolve. Stir into boiling water.

Drain potatoes and add to boiling gravy mix. Continue to boil 5 minutes more, adding water to thin if desired. Serve at once.