Bring a large pot of salted water to a boil. Add the pasta and cook as the label directs. Reserve 1/2 cup cooking water, then drain.
Meanwhile, cook the pepperoni in a separate large pot or Dutch oven over medium heat, stirring occasionally, until just crisp, 5 to 7 minutes. Transfer to a plate using a slotted spoon. Add the onion, bell pepper and garlic to the pot. Cook, stirring occasionally, until the vegetables soften, about 10 minutes.
Add 1 cup water, the tomatoes, oregano, 1/2 teaspoon salt and a few grinds of pepper to the pot. Reduce the heat to medium low; simmer until the sauce thickens slightly, 10 minutes. Add the pasta and parmesan; toss to coat, adding the reserved cooking water as needed to loosen. Remove from the heat and stir in the mozzarella and pepperoni; season with salt and pepper. Top each serving with a pinch of red pepper flakes, basil and more parmesan.
Recipe courtesy of Food Network Magazine