The hot air balloon, also referred to as a war balloon, is an experimental weapon that the mechanist originally developed for the Fire Nation in exchange for the safety of the refugees living at the Northern Air Temple. The mechanist had difficulty figuring out how to control the balloon, but resolved this issue with assistance from Sokka. The key was creating a small valve in the top of the balloon that allowed the pilot to release the hot air at will, thereby controlling the up and down movement of the balloon. The balloon also has at least one spinning propeller at its back, controlling the forward and backward movement of the balloon.
The mechanist and Sokka used a prototype war balloon against Fire Nation soldiers who attempted to invade the Northern Air Temple by dropping bombs on them. Having run out of bombs, they used the ship's furnace as an explosive to detonate a gas pocket in a nearby chasm, which caused a huge explosion that forced the invaders to retreat. Their victory also caused the balloon to lose altitude due to the loss of its heat source. Because of this, the mechanist and Sokka were forced to abandon the vessel in mid-flight, enabling War Minister Qin to recover its remnants in the woods shortly after. Upon discovering the fragments of the balloon, Qin stated, "This defeat is the gateway to many victories."
After the failed invasion on the Day of Black Sun, the Fire Nation unleashed a whole armada of these war balloons on the invaders. Much to the mechanist's despair and that of the rest of the invasion force, the troops discovered that the War Minister had adapted the war balloon's technology for use on the newer and much larger Fire Nation airships. These were used to bomb the invaders' submarines, trapping them on the Fire Nation mainland. After the invasion failed, Zuko commandeered one of these balloons to follow Aang and his friends all the way to the Western Air Temple so he could join them.
Before Zuko was accepted into the group, he used the sail of his balloon as shelter. He later used the balloon again when he and Sokka traveled to the Boiling Rock prison to save Sokka's father, Hakoda. The balloon was destroyed in a crash landing when the intense heat from the surrounding boiling lake equaled that of the balloon's heat and rendered it unable to fly. Sokka disposed of the wreck in the boiling lake to prevent the prison guards from finding it, where it was lost forever.
A year after the Hundred Year War, the Earth Kingdom acquired the specifications for hot air balloons and incorporated the lighter-than-air craft in their own line of warfare, albeit modified to now sport the Earth Kingdom emblem and colors. One such unit was used to transport Earth King Kuei to Yu Dao, a strategy which would allow him to command his army from the front and enforce the Harmony Restoration Movement.
Mai, Ty Lee, Iroh, and a unit of Kyoshi Warriors used an air balloon to rendezvous with Suki after Fire Lord Zuko's caravan was ambushed by the New Ozai Society in the woods near the Fire Nation Capital.
The original Fire Nation balloons were operated by a crew of two firebenders: one kept it in the sky by controlling the heat and the other one was in charge of its offense by attacking enemies below or flying near the balloon. However, when the Earth Kingdom military acquired the designs for the balloon, the models were modified so that they could be operated without the use of firebending.
Being dependent on hot air for altitude, the balloon is unable to remain airborne when it navigates into an area where the surrounding air is heated to at least equal temperatures as the air trapped inside the balloon.