COOK bacon in large skillet until crisp. Remove bacon from skillet; drain on paper towels. Discard drippings from skillet.
ADD tomatoes and water to skillet; bring to boil. Stir in macaroni; cover. Simmer on medium-low heat 8 to 10 min. or until macaroni is tender.
STIR in VELVEETA and bacon; cook, uncovered, on low heat until VELVEETA is completely melted and mixture is well blended, stirring frequently.