An apparatus for illuminating a balloon from within includes an illumination assembly mounted on a power supply unit. The assembly includes a hollow cylindrical body having a light source (e.g., LED) disposed at one end and electrical inputs protruding from another end. The body of the power supply unit is provided at one end thereof with a shoulder flange and cylindrical spacer to facilitate sealing of the balloon against the assembly. The power supply unit receives power from a power source (e.g., battery), and supplies power to circuitry for controlling the light source. Preferably, the assembly, made of light-weight plastic materials, together with the power source, weighs less than the lift of a helium-filled balloon in which it may be installed.