The Toffees had agreed a £40million fee with Monaco for the 25-year-old, but the deal was thrown into doubt when an issue emerged during his medical. Everton renegotiated the terms and submitted a deal sheet before the 23:00 BST deadline in an attempt to salvage the signing, only for Balogun to walk away from the move at the final hurdle.
Balogun had emerged as a late target for David Moyes after Guinea-Bissau forward Beto completed a permanent switch to Serie A side Fiorentina earlier in the day, leaving Everton light on options up front.
With the American appearing to have a change of heart, the Toffees also explored a loan move for Manchester United's Joshua Zirkzee and made an approach for Aston Villa's Tammy Abraham, but were unable to convince either forward to move to Merseyside.
The collapse leaves Everton with a threadbare striking department heading into the new season, with Thierno Barry now the club's only recognised senior forward. It also has consequences beyond Goodison Park: Monaco's need to raise funds through Balogun's sale had been central to Chelsea's hopes of signing Lamine Camara, and the Ligue 1 club's failure to complete the deal ultimately scuppered that move too.
Amid the striker frustration, Everton did complete significant business elsewhere on deadline day. The club signed Jack Grealish on a season-long loan from Manchester City, arriving as part of the same day's deal that saw Iliman Ndiaye depart Goodison Park for the Etihad Stadium in a £65million transfer.
Grealish's arrival gives Moyes a genuine creative outlet in the final third, even if the failure to add a recognised centre-forward leaves an obvious gap in the squad heading into the campaign.
For Balogun, the immediate outlook is a continued stay in Monaco until at least the January window, when the saga could resurface. The reasons behind the medical concerns that derailed the move have not been made public, with Monaco and the player's camp maintaining that he is fit to play.
Balogun began his career in Arsenal's academy before moving to France, and a return to English football looked to be an ideal fit following a productive World Cup campaign for the United States. Instead, he remains a Monaco player for now, with the club left needing to explain the collapse of a deal that had appeared close to completion for much of Tuesday evening.