Italy strengthened their grip on top spot by moving onto 13 points from five qualifiers while Malta, who slumped to a heavy 6-0 defeat by Bulgaria in Sofia last Friday, remain bottom with no points from five outings.
Buoyed by his outstanding goal in the 2-2 friendly with Brazil on Thursday, Balotelli again delivered the goods for Italy who survived two scares in the first half before applying the killer blow with a second goal in the dying minutes of the opening half.
"We have to treasure the fact that when we come up against a well-organised team we have to be quicker with our play," Italy coach Cesare Prandelli said.
"We were well prepared for the match... I urged the players to approach the match with the right attitude.
"The great performance against Brazil and the three points tonight are paramount."
Their bold reaction unsettled Prandelli's men whose struggles were laid bare when, on 16 minutes, goalkeeper Gianluigi Buffon brought down Malta midfielder Andre Schembri in the box after an intelligent pass from Roderick Briffa.
With the lively Schembri shadowing Andrea Pirlo, Italy's midfield schemer, and all the Malta players pressing hard all over the pitch, Italy were knocked off their stride as the hosts, spurred on by 17,000 fans, pressed for an equaliser.
Malta coach Pietro Ghedin was pleased with his team's much-improved showing after the dismal outing against Bulgaria.
"I am very pleased with the performance, especially after last week's disappointment against Bulgaria, but I'm upset that we missed some good chances," Ghedin, who is in his second spell at the helm of Malta, said.
"It would have been better if Mifsud had converted the penalty but he is a very hard-working player, who has 36 goals for Malta and is part of the country's football history."
