The Devils beat lowly Atalanta 3-1 with Brazil ace Pato twice on target, while Roma slipped seven points from the top as they drew 2-2 at Napoli after seven straight wins.
After three straight draws with only one goal scored, the problems began early for Inter as Simone Pepe on two minutes beat Julio Cesar with a low shot.
The worries of the suspended Jose Mourinho were allayed when Balotelli leveled on five minutes and vanished with two more first half goals from Maicon and Milito.
The Portuguese coach, who had four players suspended, watched from the stands as Balotelli fired from outside the area past Slovenian Samir Handanovic, who was stunned again when Brazil defender Maicon volleyed home after a swift action involving strikers Milito and Goran Pandev.
Just before the break, Milito nodded home a cross from Balotelli, whose ball handling on 51 minutes resulted in a spot kick converted by Antonio Di Natale.
The Serie A top scorer tallied his 19th goal and kept Milito four notches behind, but his side failed to equalize despite a great second half that saw young Colombian Juan Cuadrado dither from close range and Swiss Gokhan Inler hit the bar in injury time.
Milan struggled early in their home game to Atalanta, but Pato scored twice before the break before Chile's Jaime Valdes pulled one back and Marco Borriello flicked home the rebound after Ronaldinho's saved penalty.
Bad news for the Devils came from a muscular injury that could sideline Pato for next weekend's game at Roma.
In Naples, Roma went two up through a Julio Baptista spot kick and a goal from Mirko Vucinic, but Napoli leveled in the last 15 minutes with a German Denis header and a last-gasp penalty from Marek Hamsik.
Elsewhere, Brazilian Adailton scored a hat trick in Bologna's 4-3 win at Genoa, Parma won 1-0 over Sampdoria, Chievo edged Cagliari 2-1 as both sides had a man dismissed and bottom side Siena won 1-0 at 10-man strugglers Livorno.
Juventus are level with Napoli in fourth place when they welcome Palermo late Sunday. On Saturday, Catania hammered Bari 4-0 to move four points above the three-team drop zone, one above Lazio, who drew 1-1 at home to Fiorentina.
