During the millenia, as it lay hidden, it may have slept. Or it may have been thinking to itself "kill dwarves... kill dwarves... kill dwarves..." over and over again, working itself up into a seething rage.

For all the rise of the Dwarven city of Khazad-dûm, the Balrog lay hidden under it. But the Dwarves mined too far for Mithril, and awakened it.

In the ThirdAge, when the Fellowship of the Ring crossed Moria, Gandalf engaged the Balrog in battle. Gandalf "defeated" the Balrog in a battle that lasted over a week and was himself killed. The term "defeated" is used loosely as only two Elven Lords (Glorfindel and Ecthelion) and a Maia (Gandalf) have ever killed a Balrog and all three died for their efforts.

(Gandalf was later sent back from the dead "resurrected" with greater powers as Gandalf the White.)