Police, soldiers and the air force were caught up in the drama which was followed by a worldwide TV audience.
But nearly four hours after the balloon floated into the air, the flying saucer mystery turned out to have a very simple, down-to-earth explanation - the boy never left the ground.
Little Falcon Heene was found hiding in a cardboard box in the attic of his family's garage in Fort Collins, Colorado.
The foil-covered helium balloon was believed to have contained six-year-old Falcon Heene
The balloon is believed to have taken off after coming loose from a tether at the boy's home in Fort Collins
Police examine a compartment at the bottom of the saucer, which the boy was thought to have climbed into
After first being alerted to the boy's apparent plight, flummoxed police chiefs didn't have a clue what to do so they called in the Federal Aviation Authority, the US Air Force and the National Guard.
They didn't have much idea either, but two helicopters headed off in hot pursuit with a plan to lower an airman by winch to try to rescue the boy.
But when the homemade helium balloon finally came to earth before they could act, there was no sign of the stowaway.
The search then took a more sombre tone amid reports that a basket had dropped from the balloon, possibly with the child inside.
Just as the Heene family and searchers were beginning to fear the worst, the little boy finally emerged from his hiding place.
The discovery was a happy ending to a drama that began at about 11am yesterday when Falcon's older brother ran in to tell his father, Richard, a retired weatherman, that he saw the boy climbing on board the experimental balloon they had tethered in their back garden.
By the time he ran outside, the balloon had been hurled hundreds of feet into the air.
Unable to find any sign of Falcon, he immediately feared the worst and alerted the authorities.
Safe: Six-year-old Falcon, bottom left, with his parents and brothers and, below, he demonstrates how he hid in the attic above the family garage
The frantic Heene family couldn't bear to watch TV reports following the craft floating up to 7,000ft in the air.
It wasn't until after 4pm, as police and soldiers were fearing the search could go into the night, that Falcon's hiding place was found.
'It wouldn't be the first time we have been searching for a child and then we find they have been hiding because they think they are going to be in trouble,' said Colorado Sheriff Jim Alderman.
But he said police took the claim so seriously because Falcon's older brother was 'adamant' he saw him climb into the balloon.
'He was interviewed multiple times. I guess investigators will be talking to him again,' he added.
The drama took place in the skies above Denver airport
The mushroom-shaped craft had tipped precariously at times before gliding to the ground in a field, the culmination of a two-hour, 50-mile journey through two counties.
With the child nowhere in sight, investigators searched the balloon's path.
Several people reported seeing something fall from the craft, travelling at average speeds of 30mph, while it was in the air, and yellow crime-scene tape was placed around the home.
Kevin Kuretich, of the Colorado Division of Emergency Management, said the craft had some kind of electric power unit which was run by double-C batteries.
He said the balloon did seem to be big enough to carry a six-year-old.
Jason Humbert saw the balloon land. He said he received a call from his mother in Texas who told him about the balloon.
He said he was in a field checking on an oil well when he found himself surrounded by police who had been chasing the balloon, which came to a rest 12 miles northeast of Denver International Airport.
'It looked like an alien spaceship you see in those old, old movies. You know, those black-and-white ones.
'It came down softly. I asked a police officer if the boy was OK and he said there was no one in it,' Humbert said.
Richard and Mayumi Heene with their three children. Falcon is in the middle
Neighbor Bob Licko, 65, said he was leaving home when he heard commotion in the backyard of the family.
He said he saw two boys on the roof with a camera, commenting about their brother.
'One of the boys yelled to me that his brother was way up in the air,' Mr Licko said.
Mr Licko said the boy's mother seemed distraught and that the boy's father was running around the house.
In a 2007 interview with The Denver Post, Richard Heene described becoming a storm chaser after a tornado ripped off a roof where he was working as a contractor and said he once flew a plane around Hurricane Wilma's perimeter in 2005.
Pursuing bad weather was a family activity with the children coming along as the father sought evidence to prove his theory that rotating storms create their own magnetic fields.
Although Richard said he has no specialized training, they had a computer tracking system in their car and a special motorcycle.
The Heene family appeared twice on the American reality show 'Wife Swap', most recently in March.
'When the Heene family aren't chasing storms, they devote their time to scientific experiments that include looking for extraterrestrials and building a research-gathering flying saucer to send into the eye of the storm,' said a website entry about the show.
While the balloon was airborne, Colorado Army National Guard sent a UH-58 Kiowa helicopter and was preparing to send a Black Hawk UH-60 to try to rescue the boy, possibly by lowering someone to the balloon.
They also were working with pilots of ultralight aircraft on the possibility of putting weights on the homemade craft to weigh it down.
Rescue: Falcon squints at a news helicopter circling the family home
But the balloon landed on its own in a dirt field. Sheriff's deputies secured it to keep it in place, even tossing shovelfuls of dirt on one edge.
After the boy wasn't found, a Kiowa helicopter was being equipped with an infrared camera to fly at 1,000 feet and help search the area where something reportedly fell from the balloon, Army National Guard Capt. Michael Odgers said.
The episode led to a brief shutdown of northbound departures from one of the nation's busiest airports, said a controller at the Federal Aviation Administration's radar center in Longmont, Colorado.
FAA canceled all northbound takeoffs for about 15 minutes Thursday afternoon, said Lyle Burrington, the National Air Traffic Controllers Association representative at the center.
The balloon was about 15 miles northwest of the airport at that time.
Before the departure shutdown, controllers had been vectoring planes taking off in that direction away from the balloon, Burrington said.
Federal Aviation Administration spokeswoman Laura Brown said the agency tracked the balloon through reports from pilots.
Neighbour Lisa Eklund described seeing the balloon pass.
'We were sitting eating, out looking where they normally shoot off hot air balloons. My husband said he saw something. It went over our rooftop.
'Then we saw the big round balloonish thing, it was spinning,' she said.
'By the time I saw it, it traveled pretty fast,' she said.