A method of managing host physical memory using a balloon application executing within a guest virtual machine (GVM) running on a host platform is described. The balloon application receives allocation parameters from an entity outside the GVM, the allocation parameters identifying an amount of memory for the balloon application to allocate. The balloon application adjusts the allocated amount of memory according to the allocated amount. Physical memory backing up the allocated memory can then be assigned by virtualization software for use by another virtual machine running on the host platform.