With his share of the earnings from this campaign, Balboa settled in Hispaniola in 1505, where he resided for several years as a planter and pig farmer. He was not successful in this enterprise, however, and ended up in debt. Finally, he was forced to abandon life on the island.
In 1508, the king of Spain, Ferdinand II "The Catholic", launched the conquest of Tierra Firme (the area roughly corresponding to the Isthmus of Panama). He created two new territories in the region between El Cabo de la Vela (near the eastern border of Colombia) and El Cabo de Gracias a Dios (the border between Honduras and Nicaragua). The Gulf of Urabá became the border between the two territories: Nueva Andalucía to the east, governed by Alonso de Ojeda, and Veragua to the west, governed by Diego de Nicuesa.
In 1509, wishing to escape his creditors in Santo Domingo, Balboa set sail as a stowaway, hiding inside a barrel together with his dog Leoncico, in the expedition commanded by the Alcalde Mayor of Nueva Andalucía, Martín Fernández de Enciso, whose mission it was to aid Alonso de Ojeda, his superior.
Cémaco, together with his warriors, abandoned the town and headed for the jungle. The Spanish plundered the houses and gathered a treasure-trove of golden ornaments. Balboa kept his vow, and, in September 1510, founded the first permanent settlement on mainland American soil, and called it Santa María la Antigua del Darién.
When Nicuesa arrived at the city's port, a mob appeared, and the ensuing disturbance prevented the governor from disembarking into the city. Nicuesa insisted on being received, no longer as governor, but as a simple soldier, but still the colonists did not allow him to disembark. He and 17 others were forced to board an unseaworthy boat with few supplies, and were put out to sea on March 1, 1511. The ship disappeared, leaving no trace of Nicuesa and his men. In this way, Balboa became governor (gobernador) of Veragua.
At the end of 1512 and the first months of 1513, he arrived in a region dominated by the cacique Careta, whom he easily defeated and then befriended. Careta was baptized and became one of Balboa's chief allies; he ensured the survival of the settlers by promising to supply the Spaniards with food. Balboa then proceeded on his journey, arriving in the lands of Careta's neighbour and rival, cacique Ponca, who fled to the mountains with his people, leaving his village open to the plundering of the Spaniards and Careta's men. Days later, the expedition arrived in the lands of cacique Comagre, fertile but reportedly dangerous terrain. However, Balboa was received peacefully and even invited to a feast in his honor; Comagre, like Careta, was then baptized.
Using information given by various friendly caciques, Balboa started his journey across the Isthmus of Panama on September 1, 1513, together with 190 Spaniards, a few native guides, and a pack of dogs. Using a small brigantine and ten native canoes, they sailed along the coast and made landfall in cacique Careta's territory. On September 6, the expedition continued, now reinforced with 1,000 of Careta's men, and entered cacique Ponca's land. Ponca had reorganized and attacked, but he was defeated and forced to ally himself with Balboa. After a few days, and with several of Ponca's men, the expedition entered the dense jungle on September 20, and, with some difficulty, arrived four days later in the lands of cacique Torecha, who ruled in the village of Cuarecuá. In this village, a fierce battle took place, during which Torecha was defeated and killed in battle. His followers decided to join the expedition. However, the group was by then exhausted and several men were badly wounded, so many decided to stay in Cuarecuá to regain their strength.
Balboa received Pedrarias and his representatives in July 1514 and accepted resignedly his replacement as governor and mayor. The settlers, however, did not like the change and some were planning to take up arms against Pedrarias, even as Balboa showed respect to the new colonial authorities.
Balboa's trial began in January, 1519, and on the fifteenth of that month, Espinosa sentenced him to death by decapitation. Four of Balboa's friends, Fernando de Argüello, Luis Botello, Hernán Muñoz, and Andrés Valderrábano, accused as accomplices, were sentenced to the same fate. The sentence was to be carried out in Acla, to show that the conspiracy had its roots in that colony.
Gaspar de Espinosa, Pedrarias' underling, sailed the South Sea aboard the very ships that Balboa had commissioned. In 1520, Ferdinand Magellan renamed the sea the Pacific Ocean because of its calm waters.
Although Balboa suffered a premature death, his actions and deeds are remembered by history as the first European to cross America. Several parks and avenues throughout Panama bear the name "Vasco Núñez de Balboa," and a number of monuments honour his discovery of the South Sea. The Panamanian currency is called the Balboa, and his likeness appears on the obverse of most Panamanian coins. His name is also attached to Panama City's main port, Balboa (the Pacific entrance to the Panama Canal) and the Balboa District within Panamá Province to which the Pearl Islands that he discovered belong. In San Francisco, California, USA, Balboa's name appears among a row of avenues which are named after Spanish conquistadors and in a San Francisco neighborhood Balboa Park. There is also a large park (Balboa Park) adjacent to downtown San Diego, California which was named after Balboa in 1910. Balboa's name is also honoured in Madrid with a street and a metro station.
Vasco Nunez de Balboa was featured on the 1-cent denomination of the Panama-Pacific Exposition of 1913. The 1-cent Balboa paid the one-cent card rate, and it was used in combination with other denominations to meet large weight and foreign destinations. The Bureau of Engraving and Printing issued over 330 million of these to the public.
One of the highest orders granted by the Panamanian government to distinguished and outstanding figures, foreign and domestic, is the Orden Vasco Núñez de Balboa, in various degrees, as established by Law 27 from 28 January 1933.
Balboa received the unexpected news of a new kingdom – rich in gold – with great interest. He returned to Santa María at the beginning of 1513 to recruit more men from Hispaniola. There he learned that Fernández de Enciso had told the colonial authorities what had happened at Santa María. After seeing that there would be no assistance from Hispaniola, Balboa sent Enrique de Colmenares directly to Spain to look for help.