The 20-year-old Italian, told by his manager to cheer up after a moody first six months at the club, struck twice from the spot and tapped in a rebound in a one-sided Eastlands stroll against a woeful Villa side.
Having missed their chance eight days ago when they lost at home to Everton, City now top the standings with 38 points. Manchester United, who have three games in hand, are a point behind and can retake top spot when they visit Birmingham City later on Tuesday.
Arsenal, in action at Wigan Athletic on Wednesday, have 35 with Tottenham Hotspur climbing into fourth on 33 after beating Newcastle United 2-0 despite having a man sent off for the second game in a row.
Champions Chelsea, who have taken just six points from the last 24 having lost to Arsenal on Monday, slip to fifth on 31. They are also in action on Wednesday against Bolton Wanderers.
City bounced back from their Everton defeat with a 3-1 Boxing Day win at Newcastle built on two goals in the first five minutes and they set about their task with similar gusto in front of their own fans on Tuesday.
Balotelli, reported to be unsettled at the club he joined from Inter Milan for 22 million pounds was brought down after eight minutes and scored the penalty.
Joleon Lescott got the second five minutes later with a header ruled to have crossed the line before bouncing out, and the game was effectively over.
UNACCUSTOMED ENTHUSIASM
Balotelli tapped in the 27th-minute third after the impressive David Silva had a shot parried and the striker showed some uncustomary enthusiasm to snatch up the ball before returning to type with a casually-converted penalty.
City manager Roberto Mancini, who has been doing his best to act as a father figure for the forward, defended him again. "He is not a complicated guy, he is a good guy, he likes to look serious but he isn't," Mancini told BBC radio.
"Today I think we took a step forward, he smiled after the first goal, for the first time. and I hope it will continue."
It was as easy an afternoon's work as City will ever have as Villa barely looked interested and manager Gerard Houllier, who took over in September, has real work to do with his side only two points above the relegation zone.
Spurs struggled to break down Newcastle until Aaron Lennon struck after 57 minutes but the Londoners were reduced to 10 men for the second successive game when Younes Kabul was sent off for a headbutt eight minutes later.
However, just as in their Boxing Day win at Villa Park, Spurs still went for it and got their reward when Gareth Bale scored their second nine minutes from time with another trademark run and low shot.
"To play as we did with 10 men again, we kept the ball great, it was a fantastic result with two great goals," Spurs manager Harry Redknapp told Sky Sports News.
Sunderland had been unbeaten at home all season but reckoned without Blackpool as the Seasiders continue to make waves.
The promoted side, pre-season favourites an immediate relegation, defended with their lives for about 88 minutes of the match and claimed another impressive win with goals by DJ Campbell at the start and end of the second half.
Chris Baird had not scored a goal for almost four years but got two in the first 11 minutes for Fulham against Stoke to earn some breathing space for under-fire manager Mark Hughes as his team secured their first away league win for 16 months.
