Cook sausage in 12-inch nonstick skillet over medium-high heat, stirring occasionally, 5 minutes or until cooked. Remove sausage and set aside. Reserve 1 tablespoon drippings.
Add red peppers and onions to drippings and cook over medium-high heat, stirring frequently, 5 minutes or until tender. Remove vegetables and set aside.
Bring water and milk to a boil in same skillet. Add Knorr® Pasta Sides™ - Cheesy Bacon Flavor Macaroni and return to a boil. Reduce heat to medium and cook uncovered, stirring occasionally, 10 minutes or until pasta is tender. Stir in sausage and vegetables.