Add apples, water, lemon juice, apple pie spice, and vanilla to a large pot.
Cover and cook over medium-low heat until apples are very soft, about 25 to 30 minutes. Stir occasionally, adding a small amount of water if the apples are starting to get dry.
Remove from heat. If using sugar, add a little at a time until applesauce reaches desired sweetness.
Use an immersion blender or other blender to blend until the applesauce reaches desired consistency. For a chunkier sauce, use a potato masher.