[1] The formation of plasmoids in the near-Earth magnetotail is believed to be a key element of the substorm onset process. Previous work has identified a new scenario in MHD simulations where the nonlinear evolution of a ballooning instability is able to induce the formation of plasmoids in a generalized Harris sheet with finite normal magnetic component. In present work, we further examine this novel mechanism for plasmoid formation and explore its implications in the context of substorm onset trigger problem. For that purpose, we adopt the generalized Harris sheet as a model proxy to the near-Earth region of magnetotail during the substorm growth phase. In this region the magnetic component normal to the neutral sheet B n is weak but nonzero. The magnetic field lines are closed, and there are no X lines. Simulation results indicate that in the higher Lundquist number regime S & 10 4 , the linear axial tail mode, which is also known as "two-dimensional resistive tearing mode," is stabilized by the finite B n , hence cannot give rise to the formation of X lines or plasmoids by itself. On the other hand, the linear ballooning mode is unstable in the same region and regime, and its nonlinear development leads to the formation of a series of plasmoid structures in the near-Earth and middle magnetotail regions of plasma sheet. This new scenario of plasmoid formation suggests a critical role of ballooning instability in the near-Earth plasma sheet in triggering the onset of a substorm expansion.