Melt margarine in large nonstick skillet over medium-high heat and brown chicken, about 5 minutes. Remove chicken from skillet and reserve.
Stir vegetables into skillet and cook, stirring frequently, about 2 minutes.
Add water and milk and bring to a boil over high heat. Add Knorr® Italian Sides™ - Alfredo. Reduce heat to low and simmer, stirring occasionally, 8 minutes. Stir in reserved chicken and simmer, stirring occasionally, until pasta is tender and chicken is thoroughly cooked, about 2 minutes. Serve, if desired, with grated Parmesan cheese and cracked black pepper.