My original post for this story is largely correct (aside from the fact that the first version I read was lacking the final four paragraphs!) And so I’m posting it here, but I’ll make changes as necessary:
In the story, a man inflates a huge irregularly shaped balloon in Manhattan. It takes up several city blocks and, in places, it rests against the skyscrapers.
And that’s it.
Well, not exactly. The story is about people’s reactions to this enormous thing that takes up the entire sky but about which there is no explanation. The narrator states that people might have felt better about it if it had an ad or a “message” on the side, but no, his balloon is just soothing earth tone colors.
The story doesn’t end, exactly. It just sort of stops. [THAT WOULD BE WRONG!] But the discussion of people and their attitudes and reactions is certainly interesting and says as much about the author as it does about the narrator. Most critics agree that the story is something of a metaphor for his own art, and that is pretty obvious to see.
Okay, so as I noted, a man inflates a balloon in New York City. He does it in the middle of the night so when people wake up the balloon is just there, with no explanation. And it is a large balloon, taking up many many streets. It reaches up to building tops and kids play on and under the balloon. But mostly people seem to wonder about it.
One thing I enjoyed about the story is the absolutely innocent nature of it. I was trying to imagine such a thing as this story happening in 2009, and realizing that you could never do it. You could never even propose a balloon aloft in the city with no explanation. Security would be way too intense, and people simply wouldn’t stand for the mystery.
But in 1968, this premise (even if absurd) is delightful.
Now that I have actually finished the story (and yes, I’m still annoyed that this version online was incomplete but somehow passed off as a complete story) my opinion of the ending is radically different. It doesn’t “just stop.” In fact, we (the readers) learn why the balloon was inflated (although the citizens of New York do not). The narrator inflated the balloon for twenty-two days because his beloved was away. And such a charming and surprisingly sentimental reason is delightful given the analytical nature of the bulk of the story.
This now being my third reading of the story, I find it very engaging. And I can easily see why it is considered one of his best.

[…] [UPDATE: November 25, 2009] For the new review of the story, click here. […]
Oddly, I JUST posted about this movie that uses The Balloon as a starting point:
Thanks for posting this link. The film was really cool (love those Belgians). And I hope we can get it more views!