The station opened on 6 December 1926 as part of the Morden extension of the City & South London Railway (although the line had opened slightly earlier, on 13 September 1926), which later became part of the Northern line. The station, which is located between Clapham South and Tooting Bec stations, has entrances on the east and west sides of Balham High Road linked by a pedestrian subway. The surface buildings were designed by the architect Charles Holden. It is the only station on the Morden branch of the Northern line directly adjacent to a National Rail station.
During the Second World War, Balham was one of many deep tube stations designated for use as a civilian air raid shelter. At 20:02 on 14 October 1940, a 1400 kg semi-armour piercing fragmentation bomb fell on the road above the northern end of the platform tunnels, creating a large crater into which a bus then crashed. The northbound platform tunnel partially collapsed and was filled with earth and water from the fractured water mains and sewers above, which also flowed through the cross-passages into the southbound platform tunnel, with the flooding and debris reaching to within 100 yards of Clapham South. According to the Commonwealth War Graves Commission (CWGC), sixty-six people in the station were killed – although some sources report 64 shelterers and 4 railway staff were killed and more than seventy injured. The damage at track level closed the line to traffic between Tooting Bec and Clapham Common, but was quickly repaired, with the closed section and station being reopened on 12 January 1941. In October 2000 a memorial plaque commemorating this event was placed in the station's ticket hall. It stated that 64 lives were lost, which differed from the CWGC register at the time, and other sources. On 14 October 2010 this was replaced with a new commemorative plaque which does not state the number of fatalities.
The video for the single Missing by Everything but the Girl repeatedly uses the same shot from a moving vehicle passing between the two tube entrance buildings, while in another shot Tracey Thorn is seen walking down the side of one of them.
The bombing of the station during World War II is briefly mentioned in Ian McEwan's novel Atonement, while the film based on the book depicts the station's flooding. Both the novel and the film date the event incorrectly, with the novel placing it in September 1940, and the film dating it as 15 October rather than the previous day. The film also refers to the fracturing of gas mains, as well as water
London Buses routes 155; 249; 255; 315; 355 and N155 serve the station.