One of the earliest modern writers on Scotch whisky was Sir Robert Bruce Lockhart (author of 'Scotch', 1951). His great-grandfather James MacGregor had been illegally distilling barley at Balmenach until he received one of the first distilling licenses in the Speyside region in 1823. When James died in 1878, his brother John took over the distillery (abandoning a promising career in New Zealand). Alfred Barnard described Balmenach in the mid-1880s as 'belonging to the most ancient style... using the old-fashioned pot stills and oak casks as shown in the picture.' This was the result of deliberate design: John MacGregor refused any changes for fear they would destroy the character and quality of the whisky. In 1897, his son, another James, took over the distillery. He formed a limited company, Balmenach-Glenlivet Ltd, and made several improvements, including a railway siding with a steam locomotive, which ceased operation in October 1968, just days before the Speyside line itself closed. In 1922, the MacGregor family sold the distillery to a blending company, which became part of D.C.L. (the predecessor of Diageo) in 1925. Under S.M.D. (also a predecessor of Diageo), Balmenach expanded from four to six stills in 1960—a mark of high quality that many blenders listed as a top-grade spirit. In 1964, the floor maltings were replaced by Saladin boxes. The mash house was rebuilt in 1968, and a dark grains plant was installed ten years later. All this served the standard 'light railway scheme,' with the difference that Balmenach was designed to be entirely gravity-fed, with no pumping required between the initial charging of the wash still and the final cask filling (see Caol Ila). Balmenach was mothballed in 1993 and sold to Inver House Distillers in 1997. Production resumed the following year. The new owners did not acquire the previous stocks, which is why this fine single malt is not easily found today. In 2001, Inver House was acquired by a subsidiary of ThaiBev plc and merged into the company's international division, International Beverage Holdings (InterBev), in 2006.

In 1690, the Haughs of Cromdale near the distillery witnessed a pivotal battle where a Jacobite force was ambushed by government dragoons under cover of darkness. During the Second World War, the distillery fell silent like most of its peers, and Balmenach was repurposed as barracks for the Royal Corps of Signals. In the 1990s, Glasgow-based independent bottler Aberfoyle & Knight resurrected the spirit under the evocative 'Deerstalker' label.