Cook squash and onion until tender in a small amount of boiling water; drain. Season with salt and pepper and 1 tbls. margarine. Stir in chicken soup, sour cream, and pimento.
Combine 1/2 cup margarine and stuffing mix, stirring well until blended. Combine half of stuffing mixture with squash mixture. Spoon into 2 qt. casserole dish. Top with remaining stuffing mixture. Bake at 375 degrees for 30 to 35 minutes. This freezes well.