From the time he wrote the music for the first German sound film until his retirement in the 1960s, Balz was responsible for the lyrics to over a thousand popular hits. Much of his output was in conjunction with the composer Michael Jary; their songs helped make the singer Zarah Leander popular.
Balz was arrested several times for homosexuality. In 1936 he spent several months in prison, and was released under an agreement that mandated that his name was no longer to appear in public. To maintain the appearance of propriety he entered a "marriage blanc" with a woman named Selma. He was rearrested in 1941 by the Gestapo and was tortured in the Gestapo headquarters in Prinz-Albrecht-Straße. He was saved from imprisonment in a concentration camp by the intervention of Jary, who persuaded officials that he could produce songs that would aid the war effort. Within a day of his release, he had written two of his greatest successes, "Davon geht die Welt nicht unter" and "Ich weiß, es wird einmal ein Wunder gescheh'n". His film songs for Leander, a star of Nazi UFA musicals, became anthems for homosexuals imprisoned in concentration camps.
The fall of the Nazi regime did not spell an end to the persecution of Balz, as Paragraph 175, the law against homosexuality, continued in force. Thus his name is considerably less well-known than if he had been properly credited for his lyrics.
Balz's companion was painter and actor Jürgen Draeger, who was enjoined by a clause in Balz's will from talking about their relations for ten years following Balz's death.
The Bruno Balz Theatre in Berlin is named for him.