Bring a large pot of salted water to a boil. Add the pasta and cook until al dente according to the package directions. Drain the pasta and set aside.
While the pasta cooks, add the olive oil to a large heavy-bottomed pot set over medium-low heat. Once the oil is warm, add the onions, bell peppers and a pinch each of salt and pepper and cook, stirring constantly, until the onions are translucent, about 8 minutes. Add the sausage and cook, breaking apart the sausage with a spatula, until browned and cooked throughout, about 10 minutes.
Reduce the heat to low, add the tomato sauce then add the cooked pasta and 1/2 cup of the pepperoni to the pot; stir to combine.
Transfer half of the pasta to a 9-by-13-inch baking dish, top with half of the mozzarella, then top with the remaining pasta, followed by the remaining mozzarella, then the remaining 1/4 cup pepperoni.
Bake the pasta until the cheese is melted, about 15 minutes. Remove the baked pasta from the oven and serve.