Heat olive oil in a large pot over medium-high heat. Cook and stir sausage and onion in hot oil until the sausage and onion are browned, 7 to 10 minutes.
Pour water, jambalaya mix, and diced tomatoes with green chile peppers into the pot; bring the mixture to a boil, reduce heat to low, cover the pot, and simmer until the water is mostly absorbed and the rice is tender, about 25 minutes.
