Oberbalm is first mentioned in 1228 as "Balmes". The village grew up around a medieval pilgrimage site. It was part of the lands of the counts of Laupen-Sternberg, who lived in a castle near Oberbalm above the Scherliau river. In 1388, Bern acquired rights over the region, and Oberbalm became part of the Bernese court of Sternberg. It remained a part of Sternberg until 1803 when it became part of the Oberamt of Bern. In 1831 the Oberamt was dissolved and Oberbalm was transferred to the successor Amtsbezirk of Bern.