When the parliament raised an army Sir William was appointed lieutenant-general of the horse, under the nominal command of the Earl of Bedford. He commanded the reserve at the Battle of Edgehill, broke several regiments of the king's foot, and captured part of his artillery. Ludlow describes him spiking the king's guns with his own hands, and all accounts agree in praise of his services.
In the spring of 1644 he was detached from the army of Essex with 1,000 horse to reinforce Waller, and shared the command at the victory of New Alresford. His letter of 30 March 1644 to Essex, relating the battle, was ordered to be printed. He then rejoined Essex, accompanied him into Cornwall, and took Weymouth and Taunton (June 1644). When the infantry was forced to surrender, he broke through the king's lines, and "by an orderly and well-governed march passed above 100 miles in the king's quarters", and succeeded in joining General Middleton.
At the Second Battle of Newbury he commanded the right wing of the parliamentary horse. This was Balfour's last public exploit; with the organization of the New Model Army he retired from military service.