Balotelli's strike 13 minutes from time capped a bustling display by the controversial forward and sealed the points for Massimiliano Allegri's side after an own goal from home defender Gabriel Paletta in the 39th set them on their way to victory.
Nicola Sansone got a consolation for Parma in added time but it was too late to stop in-form Milan moving up to fourth place, a point above city rivals Inter, who they face next weekend, and level with Lazio in the Champions League play-off spot.
Milan, who have 44 points from 25 games, have now gone six games unbeaten which should give them confidence ahead of their Champions League last 16, first leg match at home to Barcelona on Wednesday. Champions Juventus are top with 55 points.
However, Balotelli was unhappy with his treatment by Parma's defenders and with the referee for allowing his opponents too much leeway and suggested that officials treat him differently.
"If I committed fouls like these I would be booked or sent off. Maybe if the referee blew for fouls every now and again I wouldn't be leaving the field with all these marks," the Italy striker told Sky Sport Italia, showing the cuts and bruises on his legs to the cameras.
However, rough treatment did not stop him scoring the winner with a deft free-kick for his fourth goal in his first three games for Milan.
"I'd taken a few kicks and couldn't really hit the ball hard like I usually do so I decided to lift it over the wall instead," added the 22-year-old.
Parma, despite suffering eight away defeats this season, were a match for Milan, especially in the first half when Amauri had two good chances to give his side the lead in the 25th.
He headed too close to Milan goalkeeper Christian Abbiati from Marco Marchionni's corner and then attempted a backheel from a cross by the impressive Jonathan Biabiany with team-mates lining up behind to tuck the ball into an empty net.
However, Paletta's own goal knocked the stuffing out the visitors and if Milan had been more clinical on the counter-attack against a very high defensive line, they could have sealed the win long before Balotelli's pearl of a set piece.
"Mario was fouled a lot tonight but was very good," said Milan manager Allegri. "Every now and again he loses his temper, but that will improve.
"When players like him arrive, the level of skill in the team goes up. He was a great buy by the club and now we're on for a great comeback in the league."
Next Sunday's match with Inter, as well as a fight for bragging rights in Milan, could be crucial in deciding who qualifies for next season's Champions League.
However, Milan played down any derby talk, with Balotelli insisting that the focus for now was on Barcelona.
"All I'm going to do is stay close to my team-mates for the Barcelona game and then worry about the Inter match," he said.
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