After Durin's Bane caused the abandonment of Moria by the Dwarves and its occupation by Orcs of the Misty Mountains, only Thrór and Nár are known to consider entering it. Thrór was murdered as he entered the East-gate of Moria, leading to the War of the Dwarves and Orcs. Even after the end of the War, many Dwarves refused to reclaim Moria, partially because of the Durin's Bane. Years later however, the Dwarves managed to reclaim the Lonely Mountain.
Though the riches of Erebor had made the Dwarves prosperous again, a strange darkness rose amongst the people of Erebor, and rumor grew of even greater wealth elsewhere. Chiefly among these grew that Durin’s folk now had the strength and numbers to return Khazad-dûm, which Balin and many others had decided to journey to. Despite King Dáin Ironfoot’s advice against their plan, he gave leave of Balin and his followers to take the expedition in T.A. 2989.  They had hoped to regain the treasures of Moria, and Balin had also hoped to find the Ring of Thrór, which was assumed to have been lost with Thrór (in reality Thrór had given the Ring to his son, Thráin, before his fateful quest to retake his kingdom).
Eventually Balin and his followers reached and entered the Dimrill Dale. Battle soon ensued that day leaving many orcs dead, and Flói killed a chieftain, but was killed soon after. The Dwarves subsequently took the East-gate and First Hall.
Afterward Flói was buried under the grass near Mirrormere, and the Dwarves continued systematically taking the eastern parts of the city which chiefly included the Twenty-first Hall. The Colony also managed to find many old treasures such as mithril, gold, Durin's Axe, and a helm.[note 1] Balin set up his throne in the Chamber of Mazarbul, proclaiming himself Lord of Moria.(Although he was of Durin's royal line the colony was too small for a kingdom thus Balin was only Lord but not King of Moria)
For five years the colony explored and thrived, even sending messengers to Erebor to inform their kin of their doings.
Turn of the tables
This all changed on 10 November T.A. 2994. As Lord Balin went to go look in Mirrormere, an orc archer fatally shot him from behind a rock. The Dwarves killed the archer, but many more orcs came up the Silverlode river. After a short battle, and with Balin’s body rescued, the surviving Dwarves retreated back into the First Hall and barred the East-gate. Eventually the Bridge of Khazad-dûm was captured, along with the Second Hall, but only after a great battle there that left Lóni, Frár and Náli dead. Óin apparently led a group west, hoping to find and escape through the Doors of Durin, but the Watcher in the Water killed him and of his group only four returned. Trapped, the remaining Longbeards with Ori retreated to the Chamber of Mazarbul, where they placed Balin’s body in a tomb. There Ori wrote the last pages in the Book of Mazarbul before he and the last few remaining Dwarves perished in a final stand.
After receiving no news from the Colony for twenty-five years, the Dwarves of Erebor became worried about the fate of their kin. As a result, Dáin Ironfoot sent Glóin and his son Gimli to Rivendell to seek news about the colony and advice from Elrond. When Frodo Baggins met Glóin and asked him about Ori, Balin, and Óin, his face darkened, saying that he did not know. Gimli eventually learned of their fate when he crossed the dwarven realm with the Fellowship of the Ring. He later reported their fate to Thorin Stonehelm.
(*) A member of Thorin and Company
- Gandalf: "Well, I can read no more for a long way, except the word gold, and Durin's Axe and something helm." This seems to suggest that the helm belonged to Durin.
- J.R.R. Tolkien, The Lord of the Rings, Appendix A, "Durin's Folk"
- J.R.R. Tolkien, The Hobbit
- J.R.R. Tolkien, The Lord of the Rings, The Fellowship of the Ring, "Many Meetings"
- J.R.R. Tolkien, The Lord of the Rings, The Fellowship of the Ring, "The Council of Elrond"
- J.R.R. Tolkien, The Lord of the Rings, The Fellowship of the Ring, "The Bridge of Khazad-dûm"