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Thinly slice chicken into bite-size strips; set aside. In a small bowl stir together the cold water and cornstarch; stir in soy sauce and dry sherry. Set aside.
Heat a wok or large skillet over medium-high heat. Add oil. Add ginger, garlic, and crushed red pepper; stir-fry for 30 seconds. Add carrots; stir-fry about 10 minutes or until carrots are nearly tender. Add pea pods and water chestnuts; stir-fry for 2 to 3 minutes or until pea pods are crisp-tender. Remove from wok.
Add chicken strips; stir-fry 2 minutes or until cooked through. Add soy sauce mixture to wok, stirring to coat chicken. Cook and stir until thickened and bubbly.
Stir in carrot mixture and heat through. Sprinkle with green onions and additional crushed red pepper.