Step 1

Combine milk, pesto, egg, garlic, and pepper in a medium bowl. Add ground beef and bread crumbs and combine, being careful not to overmix.

Step 2

Divide meat mixture into 4 portions. Press a well into each portion, leaving a 1/2-inch border around the edge. Place 2 slices pepperoni into each well, overlapping to cover the length of the well. Top each with 1/4 of the mozzarella balls. Press meat mixture around the filling to enclose; form each portion into an oblong loaf shape. Place loaves into the air fryer basket, in batches.

Step 3

Cook in the air fryer at 370 degrees F (190 degrees C) until an instant-read thermometer inserted into the thickest portion of the meat reads 165 degrees F (75 degrees C), about 15 minutes. Serve meatloaves topped with warm marinara sauce and fresh basil.