Balrog was once one of the Four Lords of the Shadowloo. A former heavyweight champion, Balrog was banned from the ring due to his excessively violent tendencies. Dishonored, and outcast, Bison recruited Balrog into the Shadowloo organization.

Seeking to finance his own "Little Las Vegas," Balrog, under Bison, began a small-time drug operation, and his minions shook down many small businesses for "protection money." That is, until Ryu appeared on the scene and easily cast aside Balrog's underlings. Balrog knew that finally a decent fighter had arrived on the scene, and his competitive urge stirred, as he issued a challenge to Ryu. The two fought, and Ryu defeated him with a powerful Hadoken, dead center into his chest. Upon hearing of Balrog's defeat, Bison smiled...He knew Ryu had finally come, and was soon to be his pawn in the global game of domination.