Melt butter in a medium (10-inch/25 cm) frying pan over medium heat. Add mushrooms, peppers and onion; saute until tender.
While vegetables are cooking, whisk together eggs and water. Pour egg mixture over vegetables in the frying pan. Cover and cook over medium heat, occasionally poking through the mixture to allow uncooked egg to flow to the bottom of the pan.
When bottom is cooked and top is almost set, finish cooking the frittata on the stove top by covering it with a lid for a few minutes, or flip it over in the pan to cook the top, or cook the top under the broiler.
To flip the frittata, place a dinner plate over the pan holding it firmly in place, then turn the frying pan and plate upside down. The frittata will fall into the plate, top side down. Slide the frittata back into the frying pan, top down. Cook for a few minutes until top (now the bottom) is cooked.
Alternately, place the frying pan under a preheated broiler until the top is cooked and slightly puffed, about a minute or two. The frying pan must be ovenproof in order to do this. To ovenproof the handle, wrap it with a double thickness of aluminum foil.