Combine peaches, water, lemon zest and juice in a large non-reactive saucepan. Bring to boil over medium-high heat; then reduce heat and boil gently, stirring occasionally, until peaches are soft, about 20 minutes.
Purée peach mixture in a food processor or food mill, just until texture is uniform. (Do not liquefy.)
Measure 8 cups purée and place in large, clean stainless-steel saucepan. Add sugar and stir mixture until sugar dissolves. Place over medium-high heat and bring to boil, stirring often. Reduce heat, and continue to boil gently, stirring frequently, until mixture thickens and holds its shape on a spoon.
The mixture can be processed for canning at this point or cooled for use in desserts or baking.
To process for canning, ladle hot butter into hot, sterile jars, leaving 1/4-inch headspace. Remove air bubbles, wipe rims, and add lids and screw bands. Process in a boiling-water bath for 10 minutes.
Makes 4 pints.