Soon after the expansion effort failed, an entrepreneur and former Washington Redskins assistant Jim Speros was granted a CFL expansion franchise for Baltimore that would play in Memorial Stadium, the Colts’ old home. Attempting to capitalize on the city’s love for its long-lost Baltimore Colts, Speros adopted a color scheme that added silver to the Baltimore Colts’ traditional colors of blue and white, as well as a stylized horse’s head logo. He also invited the old Baltimore Colts Marching Band, which had stayed together along with the old team’s uniformed cheerleaders for over a decade, to play at his games and recruited the remaining Baltimore Colts football fan clubs (“Colt Corrals”) to follow and support the new CFL franchise. He initially called the team the “Baltimore CFL Colts.” However, the NFL went to court and successfully obtained a legal injunction against the franchise’s use of any version of “Colts” in their name just hours before the team was to play its first game. Speros not only had to discard tons of purchased merchandise and souvenirs along with an advertising campaign, but also had to quickly change the franchise’s official name to the “Baltimore Football Club” (which some just called the “Baltimore CFL’s”) while keeping the team’s distinctive horse’s head logo.

Local fans tended to continue referring to the team as the “Baltimore Colts” anyway, and team officials tacitly encouraged this. For example, for most of the 1994 season, Memorial Stadium’s public address announcer, Jack Taylor, would announce the team as “your Baltimore CFL…” – followed by a pause, during which time the crowd shouted “COLTS!” – after which he would conclude, “…football team.”

Despite the changes to their name and team re-alignment, the Stallions returned with virtually the same roster for their next season. The exception was the signing of former Posse kicker Carlos Huerta to replace Igwebuike, who moved on to play with Memphis. With essentially the same team from the 1994 season, optimism and Grey Cup expectations were high for the Stallions. Optimism became reality as Baltimore continued their on-field dominance from the previous season. They started the season 2-3, but did not lose another game for the rest of the season. They ultimately finished with a 15–3 regular season record – first place in the South Division, and tying the Calgary Stampeders for the best record in the CFL.

Quarterback Tracy Ham with Mike Pringle and Robert Drummond were the most potent backfield in the CFL. Chris Armstrong became the team’s top receiver and the defense continued dominating opponents by allowing only 369 points-against, ranking the squad third in team defense. Mike Pringle had a slight drop-off from his 1994 numbers by rushing for 1,791 yards, being named the CFL’s Most Outstanding Player.

After defeating Winnipeg 36–21 in the divisional semifinals, the Stallions defeated the Texans 21–11 in the South final in what is (as of the 2017 season) the last meaningful CFL game played in the United States. This vaulted them to the Grey Cup final for the second straight season. They traveled to Regina’s Taylor Field to face the 15–3 North Division champion Stampeders, who were led by coach Wally Buono, QB Doug Flutie, and his two top receivers, Allen Pitts and Dave Sapunjis. During the game, the winds at Taylor Field were particularly strong and gusted up to 85 km/h (52.8 mph). That did not slow down the Stallions, as they defeated the Stampeders, 37–20 to become the first American team to win the Grey Cup, with Tracy Ham becoming the Grey Cup’s Most Valuable Player. Counting the playoffs, the Stallions ended the season on a 16-game winning streak.

After the 1995 season, the CFL decided to disband three of its five American franchises and return to its traditional East-West divisional alignment for the 1996 season. The two remaining American teams, Baltimore and San Antonio, were to be placed in the CFL’s East Division.

However, this strategy collapsed just a week before the Grey Cup, when longtime Cleveland Browns owner Art Modell announced he would be moving his team to Baltimore. Speros had initially not believed the rumors of Modell courting Baltimore when they cropped up in September. However, as soon as the move was announced, local support for the Stallions dried up almost overnight. The Grey Cup victory celebration at Inner Harbor went almost unnoticed in the local media. Speros soon realized that while the Stallions had been a runaway hit, they could not even begin to go head-to-head with an NFL team. Even without this to consider, continuing to use Memorial Stadium would have been a logistical nightmare once the NFL season began in September, and no other stadium in the Baltimore area was suitable or large enough even for temporary use.

Rather than risk being reduced to “minor league” status in Baltimore, he announced plans to move the franchise. He was actually very close to moving the franchise to Houston, Texas, to take the place of the NFL’s recently departed Houston Oilers in the Astrodome, with then-Houston Astros owner Drayton McLane as a minority partner. However, when it became apparent that the CFL was writing off its American experiment as a lost cause, he decided to relocate the Stallions franchise to Montreal as the third and current incarnation of the Montreal Alouettes. Speros kept the Alouettes for only one year before selling the franchise to current owner Robert C. Wetenhall in 1997.