This hearty spaghetti and meatball casserole brings tender pasta, savory beef-and-Italian-sausage meatballs, and marinara together under a bubbling layer of Monterey Jack and mozzarella. It’s an Italian-American comfort-food favorite that serves a crowd and can be garnished with fresh basil and extra marinara.
Preheat the oven to 375°F. Line a baking sheet with foil, set a wire rack on top, and lightly coat the rack with cooking spray.
In a large bowl, combine the ground beef, Italian sausage, egg, bread crumbs, grated onion, Parmesan, black pepper, garlic powder, and ½ teaspoon of the salt. Shape into meatballs about 1¾ inches wide and arrange them on the prepared rack.
Bake the meatballs for 10 minutes, then remove them from the oven and set aside. Reduce the oven temperature to 350°F and lightly grease a 9 × 13-inch baking dish with cooking spray.
Warm the olive oil in a large pot over medium heat. Add the diced onion and bell pepper and cook for 5–6 minutes, stirring often, until beginning to soften. Stir in the mushrooms and minced garlic and cook for another 2–3 minutes.
Pour in the marinara sauce and stir in the sugar, if using, and the remaining ½ teaspoon of salt. Add the cooked spaghetti, 1½ cups of the Monterey Jack, and ½ cup of the mozzarella. Mix until the pasta is evenly coated.
Transfer the pasta mixture to the prepared baking dish. Arrange the meatballs on top and sprinkle with the remaining Monterey Jack and mozzarella. Cover the dish with foil.
Bake at 350°F for 25–30 minutes. Remove the foil and bake for about 10 minutes more, until the cheese is melted and bubbly. Garnish with fresh basil, if desired, and serve with additional marinara sauce.