This paper considers the on-line traffic grooming problem in WDM-TDM switched optical mesh networks without wavelength conversion capability. The objective is to efficiently route connection requests with fractional wavelength capacity requirements onto high-capacity wavelengths and balance the load on the links in the network at the same time. To do so, we propose a cost function, which not only encourages grooming new connection requests onto the wavelengths that are being used by existing traffic, but also performs load balancing by intelligently increasing the cost of using wavelengths on links. The performance results obtained by experiments on a representative sized mesh network show that the proposed algorithm outperforms the existing algorithms.