The Nationals also optioned outfielders Rogeravin Bernadina and Justin Maxwell to Double-A Harrisburg, pitchers Tyler Clippard and Garrett Mock and first baseman Josh Whitesell to Triple-A Columbus and left-hander Ross Detwiler to Class-A Potomac.
In addition, the Nationals released catcher Chad Moeller unconditionally.
Balester, Clippard and Mock, the team's top pitching prospects, made it back to the locker room after receiving the news from manager Manny Acta. The skipper told all three players that they must have better command of their fastballs if they want to make it in the big leagues.
Clippard pitched on Monday against the Tigers and didn't give up a run in 3 1/3 innings.
"Obviously, I was disappointed. That doesn't mean I won't be contributing in the near future," Clippard said. "I was happy with my last outing. It was a good stride in the right direction. First two outings, I just had problems with my fastball. Today, it was where I wanted it to be, for the most part. As you can tell, when it's like that, I'm tough to hit."
Balester had a feeling he was getting demoted because he pitched just 2 1/3 innings against the Indians on Sunday. He felt it was time for the established pitchers to get stretched out.
Balester also acknowledged that he was nervous when he arrived in Spring Training, but started to relax in recent days.
"Everything was good. I'm going to work hard to get up here. I got my taste," Balester said. "You kind of knew that something was going to happen. This is my first big league Spring Training. The pitchers need their innings."
Mock refused to let his emotions get the best of him and listened to what Acta had to say about improving in professional baseball.
"I'm a young guy. I have some things I need to refine," Mock said. "If I can make the adjustments that I need to make, maintain some consistency throughout the season, I'll get my chance. I made it a point to get the emotions out of the equation."
Bill Ladson is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.