Preheat your oven to 400°F. Lightly spray a 9×13-inch baking dish with nonstick cooking spray.

In the prepared baking dish, combine the dry elbow macaroni, marinara sauce, water, Italian seasoning, and most of the pepperoni slices, reserving ¼ cup for topping. Stir thoroughly to ensure the macaroni is evenly coated with the sauce and seasoning. Cover the baking dish tightly with aluminum foil.

Bake the casserole, covered, for 25 minutes.

Carefully remove the aluminum foil. Sprinkle the top evenly with mozzarella cheese and the reserved pepperoni slices. Return the dish to the oven and bake uncovered for an additional 10-15 minutes, or until the cheese is hot and bubbly.

Remove the dish from the oven and let it rest for 5 minutes. Garnish with chopped basil before serving.