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For the sauce, in a large saucepan set over medium heat, heat the olive oil. Add the onion and garlic, and cook until soft and starting to brown, 3-5 minutes. Add the tomatoes and their juices, breaking them up with the back of a wooden spoon, and bring to a boil, stirring often. Lower the heat to medium-low and simmer until the sauce has thickened, 15-20 minutes. Stir in the basil and season with salt and pepper.
Meanwhile, in a large bowl, combine the milk, egg, cheese, breadcrumbs, oregano, salt and pepper. Add the ground chicken and mix gently to avoid overworking the meat. Shape into small, golf ball-sized meatballs – You should have 18 to 24 meatballs.