Are Mike and Balrog the same character?

Great question—and one that comes up a lot. The short answer: officially, no... but in practice, almost everyone considers it “yes”.

Who is Mike in Street Fighter 1?
In the very first Street Fighter, Mike is an American opponent, a boxer, clearly inspired by Mike Tyson, but with very little development.

And what about Balrog?
In Street Fighter II, Balrog is also an American boxer, with a very similar style, the same Tyson-like inspiration, and a much more developed character.

The link between Mike and Balrog
Officially (Capcom), Mike and Balrog are two distinct characters. But in practice, they share the same concept, the same nationality, and a very close role.

In short, many fans see Balrog as an improved (or renamed) version of Mike.