The warning came as a leading players' union official claimed the 21-year-old needs professional help for his disciplinary problems.
Mancini said: "He has a lot of quality but he can lose it with his attitude."
The City boss also indicated he would "probably" try to sell Balotelli in the summer after his sending off in last weekend's defeat at Arsenal, which was merely the latest in a long line of misdemeanours.
Balotelli has since apologised and stated his commitment to the club, a gesture which Mancini has accepted but the City manager said his actions would speak louder than words.
"We are happy but it doesn't change the situation," he said. "If he wants to stay he should change his mind.
"I don't think he can stay here for 10 years together with me. This is impossible," he added. "But if tomorrow, or in two or three years, he changes managers or squads it is important he changes his behaviour."
Balotelli has courted controversy for his antics on and off the field throughout his two seasons at City.
Theo van Seggelen, the secretary general of world players' union FIFPro, believes Balotelli has to accept he has a problem.
Van Seggelen told BBC Sport: "I think that we have to realise and conclude that, after all these incidents, my personal opinion is that he needs, really, professional help."