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To prepare meatballs: Preheat oven to 325°F. In a large bowl, combine meatloaf mix (or beef, pork and veal), onion, breadcrumbs, garlic, parsley, Parmesan and egg. Mix until ingredients are evenly blended. Form about 1 tablespoon meat mixture around a piece of string cheese. Shape into a ball. Repeat with remaining mixture and cheese, for a total of 40 meatballs.
Heat oil in a large nonstick skillet over medium to medium-high heat. Brown meatballs in two batches, 3 minutes per batch, turning once. Transfer to a large rimmed baking sheet. Remove skillet from heat. Bake meatballs for 17 minutes. Keep warm.
Meanwhile, prepare spaghetti and sauce: Bring a large pot of water to a boil. Add spaghetti and cook for 12 minutes, or according to package directions. Drain.
While pasta cooks, return skillet to medium heat. Add sliced garlic and cook 1 minute. Add crushed tomatoes, diced tomatoes, tomato paste, sugar, salt and pepper. Simmer over medium-low heat, stirring occasionally, for 15 minutes. Remove from heat and stir in basil and meatballs.
To serve, transfer spaghetti to a platter or individual bowls and top with meatballs and sauce.