"Yes I am disappointed that Caster Semenya is not here. She is a star athlete," he told reporters in Pretoria.
He said it was concerning that a runner of Semenya's calibre was not participating in the event.
"It is a concern for me. Something is happening."
He said it was important for the country's star athletes to compete internationally, and prove their worth through hard work.
"Those who are here worked hard to be here. You've got to continue to test yourself against the best. It is not going to fall into your lap."
Mbalula and Deputy President Cyril Ramaphosa were in Pretoria to send off 187 athletes who would be leaving for the athletic event on Wednesday.
"Our message to them is 'Go and represent South Africa. Be proud of your history and where we come from'."
He said the team represented the diversity of the country.
Mbalula said transformation in sport was a process and that all the athletes had gone through rigorous programmes to meet the requirements to qualify for the athletic event.
He said for true transformation to take place, it needed to be addressed at the grass-roots level and in schools.
"Most of the talent that we have is still raw and needs nurturing... All they need is support to be identified and nurtured."
Rugby Sevens player Cecil Afrika, who was also the South African team's flag bearer, said the group was excited to get to Scotland.
"We can't wait to go out and do our best. We as a team are looking forward to the challenges."
Leith Shankland, a member of the swimming team, said he was touched by Ramaphosa's words of encouragement.
"I thought the deputy president's message was powerful. To see how he sees us as a diverse, yet unified group gives you that much more motivation to perform.
"When you do it for yourself it's all good and well, but it's better when you do it for the nation."
The games will start next Wednesday and end on August 3.
The team, dressed in green and gold tracksuits and takkies, took a photo with Ramaphosa and Mbalula after having lunch at the presidential guest house.
Alec Moremi, the director-general of the sport and recreation department, joked that the athletes were not allowed to take "selfies" during proceedings.
Ramaphosa said the country would support the athletes on the journey.
"This country is going to be fully and totally behind you and that should urge you to perform at your highest levels.
"You will bring back with you bags of gold and silver and even some measure of bronze."
Ramaphosa and Mbalula were wearing the green and gold "Team South Africa" tracksuit jacket like the athletes' attire.
Ramaphosa said the group of athletes represented a non-racial South Africa.
"Today when I look at you I look at the colours of the rainbow... We are different, we are united but we are one thing... People in Glasgow will look at you [on Mandela Day] and they will say these are Mandela's children."