Preheat oven to 400°F. Combine sauce, water, chilies, tomatoes and 1/2 cup cheese in large bowl. Stir in uncooked macaroni. Spoon into 2-quart casserole; cover tightly with foil.
Bake 45 minutes. Remove foil and sprinkle with remaining 1/2 cup cheese.
Bake, uncovered, an additional 5 minutes. Let stand 5 minutes before serving.