Balaguer was born on 1 September 1906 in Villa Bisonó (also known as Navarrete), Santiago Province in the northwestern corner of the Dominican Republic. His father was Joaquín Jesús Balaguer Lespier, a Puerto Rican native of Catalan and French ancestry, and his mother was Carmen Celia Ricardo Heureaux, daughter of Manuel de Jesus Ricardo and Rosa Amelia Heureaux (of French descent), who was also a cousin of President Ulises Heureaux. Balaguer was the only son in a family of several daughters.

For the 500th anniversary of Christopher Columbus' landing in the Americas and the visit of Pope John Paul II, Balaguer spent millions on a restoration of parts of historic, colonial Santo Domingo, and on sprucing up the parts of the city to be transversed by the pope, including the construction of a grand new avenue lined with modern housing blocks.

When Trujillo arranged to have his brother Héctor re-elected to the presidency in 1957, he chose Balaguer as vice-president. Three years later, when pressure from the Organization of American States (OAS) convinced the dictator that it was inappropriate to have a member of his family as President, Trujillo forced his brother to resign, and Balaguer succeeded to the post.

The situation was dramatically altered, however, when Trujillo was assassinated in May 1961. Trujillo's son, Ramfis, initially inherited power with Balaguer as his puppet. They initially took steps to liberalize the regime, granting some civil liberties and easing Trujillo's tight censorship of the press. Meanwhile, he revoked the nonaggression pact made with Cuba in January 1961. These measures did not go nearly far enough for a populace who had no memory of the instability and poverty that preceded Trujillo, and wanted more freedom and a more equitable distribution of wealth. At the same time, Ramfis' reforms went too far for the hard-line trujillistas led by his own uncles, Héctor and José Arismendi Trujillo. As the OAS continued economic sanctions imposed for Trujillo's attempted murder of Venezuelan President Romulo Betancourt, Ramfis warned that the country could descend into civil war between left and right.

The Union Civica Nacional (UCN) called a national strike and demanded the formation of a provisional government under their leader, Viriato Fiallo, with elections to be delayed until 1964. The military were vehemently against the UCN taking power and Echaverría proposed a continuation of the Balaguer regime until the elections. The American consul mediated between the two sides and in January 1962 final agreement led to the creation of a seven-member Council of State, led by Balaguer but including members of the UCN, to replace both the Dominican Congress and the President and his cabinet until the election. The OAS finally lifted sanctions against the country upon the formation of the council. However, popular unrest against Balaguer continued and many saw Echaverría as positioning himself to seize power. Military forces opened fire on demonstrators on 14 January which led to rioting the following day. On 16 January, Balaguer resigned and Echaverría staged a military coup d'état and arrested the other member of the council. With the US supporting the UCN and a new national strike beginning immediately, Echaverría was arrested by other officers two days later. The Council of State was restored under the leadership of Rafael Bonnelly and Balaguer went into exile in New York and Puerto Rico.

Balaguer found a nation severely beaten by decades of turbulence, with few short times of peace, and virtually ignorant of democracy and human rights. He sought to pacify the enmities surviving from the Trujillo regime and from the 1965 civil war, but political murders continued to be frequent during his administration. He succeeded in partially rehabilitating the public finances, which were in a chaotic state, and pushed through a modest program of economic development. He was easily reelected in 1970 against fragmented opposition and won again in 1974 after changing the voting rules in a way that led the opposition to boycott the race.

Ronald Reagan once said of him "President Balaguer has been a driving force throughout his country's democratic development. In 1966 he led democracy's return to the Dominican Republic after years of political uncertainty and turmoil. Indeed, he is, in many ways, the father of Dominican democracy" and Jimmy Carter complimented him saying "President Balaguer has set an Example for all Leaders in this nation in changing his own country and his own people away from a former totalitarian government to one of increasingly pure democracy."

In 1978 Balaguer sought another term. However, by this time, inflation was on the rise, and the great majority of the people had gotten little benefit from the economic boom of the past decade. Balaguer faced Antonio Guzmán, a wealthy rancher running under the banner of the Dominican Revolutionary Party. When election returns showed an unmistakable trend in Guzmán's favor, the military stopped the count. However, amid vigorous protests at home and strong pressure abroad, the count resumed. When the returns were all in, Guzmán handed Balaguer the first loss of his electoral career. When Balaguer left office that year, it marked the first time in the Dominican Republic's history that an incumbent President peacefully surrendered power to an elected member of the opposition.

In the 1982 elections, the PRD's Salvador Jorge Blanco defeated Balaguer, who had merged his party with the Social Christian Revolutionary Party to form the Social Christian Reformist Party two years earlier.

Balaguer ran again in the elections 1986, and took advantage of a split in the PRD and an unpopular austerity program to win the presidency again after an eight-year absence. By this time, he was 80 years old and almost completely blind (he had suffered from glaucoma for many years).

Balaguer was narrowly reelected in the elections of 1990, defeating his old foe Juan Bosch by only 22,000 votes out of 1.9 million votes cast amid charges of fraud.

More controversial was that Balaguer spent two hundred million US dollars on the construction of a massive ten-story Columbus Lighthouse. Completed in 1992, the Columbus Lighthouse was designed to beam the image of a Christian cross into the night sky and to be visible for tens of miles. Since completion, the Columbus Lighthouse, which supposedly houses Columbus's remains, has been a minor tourist attraction. Its light has almost never been used due to extremely high Energy costs and frequent blackouts in the country. However, its symbolism and expense were the source of much controversy.

In the 1994 elections, Balaguer decided to run again for the presidency, even though he was almost 90 years old and completely blind. This time, his most prominent opponent was José Francisco Peña of the PRD.

In the 1996 elections, Balaguer's vice President, Jacinto Peynado, finished well short of making it to the runoff. Balaguer then threw his support to the Dominican Liberation Party's Leonel Fernández in an unusual coalition with Bosch, his political foe of over 30 years.

In 2000, Balaguer sought the presidency yet again. He won around 23% of the votes in the election, with PLD candidate Danilo Medina just barely nosing him out for a spot in the runoff with PRD candidate Hipólito Mejía. Balaguer hinted that his supporters might split their votes between Mejía and Medina in the runoff. Medina would have needed nearly all of Balaguer's supporters to cross over to him in order to have any realistic chance of overcoming a 25-point deficit in the first round. When it was apparent Medina would be lucky to get half of them, he pulled out of the runoff, handing the presidency to Mejía.

On July 14, 2002, Joaquín Balaguer died of heart failure at Santo Domingo's Abreu Clinic at the age of 95.

Although official and unofficial repression of the opposition parties (the Dominican Revolutionary Party and National Civic Union, as well as the communist Dominican Popular Movement) continued, Balaguer publicly condemned this repression and in September he pledged to form a coalition government. Hector and Jose Trujillo left the country in October but the opposition parties demanded Ramfis withdraw from the government as well. At the end of October, Ramfis announced that he would resign if the OAS agreed to lift the economic sanctions. The OAS agreed on November 14 but Ramfis’ uncles returned to the country the following day, hoping to lead a military coup. Ramfis resigned and went into exile on November 17 and rumours circulated that Air Force general Fernando Arturo Sánchez Otero would support pro-Castro Revolutionaries. The United States now sent a small fleet of ships and 1,800 marines to patrol Dominican waters. The US consul informed Balaguer that these forces stood ready to intervene at his request, and would be supported by forces from Venezuela and Colombia. Air Force general Pedro Rafael Ramón Rodríguez Echavarría announced his support for Balaguer and bombed pro-Trujillo forces. The Trujillo brothers again fled the country on November 20 and Echavarría became Secretary of Armed Forces.