Heat oven to 350°F. Lightly grease 2 ½-quart baking dish. Cook macaroni according to package directions; drain well. Pour into large bowl.
Toss chili, salsa, green pepper and chili powder with macaroni until well mixed. Stir in 1 ½ cups cheese. Spoon into prepared casserole. Top with remaining 1/2 cup cheese.
Bake 30 to 35 minutes or until hot and cheese is melted and lightly browned.