Place bacon in a large, deep skillet. Cook over medium high heat until evenly brown. Drain, reserving drippings, crumble and set aside.
In a medium saucepan heat sauerkraut with a little water over medium heat. Stir in crumbled bacon, sugar and 3 to 4 tablespoons of bacon drippings. Cook for 20 minutes, or until heated through. Season with salt and pepper to taste.