A marine drive has an internal combustion engine that rotates a propulsor shaft that is operatively coupled to a propulsor to impart a propulsive thrust in water. The marine drive has a gearcase housing having an upper portion above a lower portion, the lower portion supporting the propulsor shaft. An exhaust passage in the gearcase housing is configured to convey exhaust gas from the internal combustion engine. An exhaust outlet on the upper portion of the gearcase housing is configured to discharge the exhaust gas from the exhaust passage to the water. The exhaust outlet faces the propulsor so that the exhaust gas is discharged into the water and towards the propulsor so as to aerate the water encountered by the propulsor.