The Re-colonization of Moria was an attempt by the noble dwarf Balin to rebuild the ancient Dwarven Kingdom of Moria in the years TA 2989 to TA 2994. Under the leadership of Balin, the initial effort was successful, and for a while the Dwarves reclaimed some of Moria. The tide turned in favor of the goblins, however, when the Balrog known as Durin's Bane emerged and led a massive army of goblins in a counter-attack. No dwarf of Balin's Colony in Moria survived.
Forty-eight years after the Battle of the Five Armies, Balin along with Flói, Óin, Ori, Frár, Lóni, Náli and a large colony of Dwarves marched from the Lonely Mountain to Moria to reclaim the dwarven city with the unwilling leave of Dain II Ironfoot as he feared what was there. He hoped to reclaim some of the lost treasures of the lost realm like the Ring of Thrór. The initial battles took place from the Dimrill Dale to the Chamber of Mazarbul in which Flói was killed before they reached the First Hall. Nevertheless everything went well as the Dwarves proved to be fiercely determined to take back their home, slaying every goblin in their path, eventually some of Moria was reclaimed and they dwelt in the Twenty-first Hall until Balin moved to the Chamber of Mazarbul which then become his seat of government from then on. For the next few years, Balin ruled as Lord of Moria. The goblins became a mere nuisance during those years and were not serious threats. Here Balin and company found Durin's Axe and some sort of 'helm'.
Little did the Dwarves know, that Moria was ruled by a Balrog, a demon of the Eldar Days that survived in the deeps for many thousands of years that the Dwarves were no match for. By the year TA 2994, Durin's Bane and a horde of goblins launched a massive counterattack from the east. Balin was shot by an archer and died in Dimrill Dale and many other Dwarves perished as well and retreated into the mines. Bloody fighting took place all over Moria, but the strength of the Dwarves were ultimately no match for the sheer number of goblins and the power of the Balrog. Soon the Bridge of Khazad-dum and the Second Hall were taken by the goblins. Frár and Lóni and Náli were among the casualties the Dwarves lost in the second hall. Oin and a group of Dwarves tried to escape through the Doors of Durin but were killed by the Watcher in the Water. The last Dwarves barred the doors of the Chamber of Mazarbul and were able to built a tomb for Balin. Eventually the goblins broke through and slew the remaining Dwarves ending the peaceful re-colonization of Moria.
With the Dwarven colony destroyed, Moria continued to be a place of evil that none dared enter until the Fellowship of the Ring learned of it when they passed through it, slaying Durin's Bane in the process.