remove thin outer rind of grapefruit and lemons with a vegetable peeler and slice thin using scissors or a sharp knife. Or use a zester. Place rind and water in a large stainless steel or enamel saucepan. Bring to a boil over high heat; cover, reduce heat and boil gently for 20 minutes.
Remove and discard remaining white rind and seeds from fruit. Finely chop pulp in a food processor or blender and add to saucepan. Bring to a boil over high heat, reduce heat, cover and boil gently for 10 minutes, stirring frequently.
Add sugar to fruit. Return to a boil over high heat and boil rapidly, uncovered until mixture will for a gel (using the ball blue canning method for testing), about 30 minutes, stirring frequently. Remove from heat.
Ladel into hot jars and process for 10 minutes, or longer depending on your elevation.