In a large skillet, cook beef over medium heat until no longer pink, breaking it into crumbles; drain. Stir in water and taco seasoning. Bring to a boil; cook and stir for 2 minutes or until thickened.
Meanwhile, quarter the biscuits; place in a greased 13x9-in. baking dish. Layer with beef mixture, chili and cheese.
Bake, uncovered, at 375° for 25-30 minutes or until cheese is melted and biscuits are golden brown. Serve with salsa and sour cream if desired.