Drain water chestnuts and wrap each chestnut in 1/2 slice of bacon. Secure with a toothpick.
Place bacon-wrapped water chestnuts in single layer in a baking dish.
Mix together the Miracle Whip, brown sugar, and chili sauce. Pour over the bacon-wrapped water chestnuts, avoiding toothpicks.
Bake at 350 degrees for 45 minutes.