The song, according to lead singer Johnny Rzeznik, is based on a woman who is struggling with a heroin addiction and her lover who is desperately trying to save her. He has also said that it is about "seeing someone you love that is so great just screw up so bad." Speculation as to the exact subject matter of the song has also been attributed to the ex-wife of bassist Robby Takac (who had overdosed on heroin).
Like many other songs by Goo Goo Dolls, "Black Balloon" uses an unusual alternate tuning. Several electric guitars used in the introduction and the acoustic rhythm guitar are tuned to an open D-flat fifth chord. It was half-stepped on the album version.
The video for the song opens with a woman blowing smoke into a soap bubble (a "black balloon"). The video then changes focus and shows various scenes from a 50s or 60s era swim club while the band performs the song. Tracy Phillips is found in this video as well. The video was done by Nancy Bardwell.
During live performances of the song, fans can often be seen inflating black balloons and batting them around in the crowd.