The first military use of a balloon was at the Battle of Fleurus in 1794, when L'Entreprenant was used by French Revolutionary troops to watch the movements of the enemy. On April 2, 1794, an aeronauts corps was created in the French army; however, given the logistical problems linked with the production of hydrogen on the battlefield (it required constructing ovens and pouring water on white-hot iron), the corps was disbanded in 1799.

The first major-scale use of balloons in the military occurred during the American Civil War with the Union Army Balloon Corps established and organized by Prof. Thaddeus S. C. Lowe in the summer of 1861. Originally, the balloons were inflated with coal gas from municipal services and then walked out to the battlefield, an arduous and inefficient operation as the balloons had to be returned to the city every four days for re-inflation. Eventually hydrogen gas generators, a compact system of tanks and copper plumbing, were constructed which converted the combining of iron filings and sulfuric acid to hydrogen. The generators were easily transported with the uninflated balloons to the field on a standard buckboard. In all, Lowe built seven balloons that were fit for military service.

The first application thought useful for balloons was map-making from aerial vantage points, thus Lowe's first assignment was with the Topographical Engineers. General Irvin McDowell, commander of the Army of the Potomac, realized their value in aerial reconnaissance and had Lowe, who at the time was using his personal balloon the Enterprise, called up to the First Battle of Bull Run. Lowe also worked as a Forward Artillery Observer (FAO) by directing artillery fire via flag signals. This enabled gunners on the ground to fire accurately at targets they could not see, a military first.

Lowe's first military balloon, the Eagle was ready by October 1, 1861. It was called into service immediately to be towed to Lewinsville, Virginia, without any gas generator which took longer to build. The trip began after inflation in Washington, D.C. and turned into a 12 mile (19 km), 12-hour excursion that was upended by a gale force wind which ripped the aerostat from its netting and sent it sailing to the coast. Balloon activities were suspended until all balloons and gas generators were completed.

With his ability to inflate balloons from remote stations, Lowe, his new balloon the Washington and two gas generators were loaded onto a converted coal barge the George Washington Parke Custis. As he was towed down the Potomac, Lowe was able to ascend and observe the battlefield as it moved inward on the heavily forested peninsula. This would be the military's first claim of an aircraft carrier.

The Union Army Balloon Corps enjoyed more success in the battles of the Peninsula Campaign than the Army of the Potomac it sought to support. The general military attitude toward the use of balloons deteriorated, and by August 1863 the Balloon Corps was disbanded.

The Confederate Army also made use of balloons, but they were gravely hampered by supplies due to the embargoes. They were forced to fashion their balloons from colored silk dress-making material, and their use was limited by the infrequent supply of gas in Richmond, Virginia. By the summer of 1863, all balloon reconnaissance of the Civil War had ceased.