Age-related deterioration of balance control is widely regarded as an important phenomenon influencing quality of life and longevity, such that a more comprehensive understanding of the neural mechanisms underlying this process is warranted. Specifically, previous studies have reported that older adults typically show higher neural activity during balancing as compared to younger counterparts, but the implications of this finding on balance performance remain largely unclear. Using functional near-infrared spectroscopy (fNIRS), differences in the cortical control of balance between healthy younger (n = 27) and older (n = 35) adults were explored. More specifically, the association between cortical functional activity and balance performance across and within age groups was investigated. To this end, we measured hemodynamic responses (i.e., changes in oxygenated and deoxygenated hemoglobin) while participants balanced on an unstable device. As criterion variables for brain-behavior-correlations, we also assessed postural sway while standing on a free-swinging platform and while balancing on wobble boards with different levels of difficulty. We found that older compared to younger participants had higher activity in prefrontal and lower activity in postcentral regions. Subsequent robust regression analyses revealed that lower prefrontal brain activity was related to improved balance performance across age groups, indicating that higher activity of the prefrontal cortex during balancing reflects neural inefficiency. We also present evidence supporting that age serves as a moderator in the relationship between brain activity and balance, i.e., cortical hemodynamics generally appears to be a more important predictor of balance performance in the older than in the younger. Strikingly, we found that age differences in balance performance are mediated by balancing-induced activation of the superior frontal gyrus, thus suggesting that differential activation of this region reflects a mechanism involved in the aging process of the neural control of balance. Our study suggests that differences in functional brain activity between age groups are not a mere by-product of aging, but instead of direct behavioral relevance for balance performance. Potential implications of these findings in terms of early detection of fall-prone individuals and intervention strategies targeting balance and healthy aging are discussed.