On Halloween, Gotham City mayor Don Mitchell Jr. is murdered by the Riddler, a masked killer. Reclusive billionaire Bruce Wayne, who has operated for two years as the vigilante Batman, investigates the murder alongside the Gotham City Police Department (GCPD). Lieutenant James Gordon discovers a message that the Riddler left for Batman. The following night, the Riddler kills Commissioner Pete Savage and leaves another message for Batman.

Batman and Gordon discover that the Riddler left a thumb drive in Mitchell's car containing images of Mitchell with a woman, Annika Kosolov, at the Iceberg Lounge—a nightclub operated by the Penguin, gangster Carmine Falcone's lieutenant. While the Penguin pleads ignorance, Batman notices that Selina Kyle, Annika's roommate, works at the club as a waitress. When Annika disappears, Batman sends Selina back to the Iceberg Lounge for answers and discovers that Savage was on Falcone's payroll, as is District Attorney Gil Colson.

The Riddler abducts Colson, straps a timed collar bomb to his neck, and sends him to interrupt Mitchell's funeral. When Batman arrives, the Riddler calls him via Colson's phone and threatens to detonate the bomb if Colson cannot answer three riddles. Colson refuses to answer the third—the name of the informant who gave the GCPD information that led to a historic drug bust ending gangster Salvatore Maroni's operation—and dies. Batman and Gordon deduce that the informant may be the Penguin and track him to a drug deal. They discover that Maroni's operation transferred to Falcone, with many corrupt GCPD officers involved. Selina inadvertently exposes them when she arrives to steal money and discovers Annika's corpse in a car trunk. After a car chase, Batman captures the Penguin but learns he is not the informant.

Batman and Gordon follow the Riddler's trail to the ruins of an orphanage funded by Bruce's murdered parents, Thomas and Martha Wayne, where they learn that the Riddler holds a grudge against the Wayne family. Bruce's butler and caretaker, Alfred Pennyworth, is hospitalized after opening a letter bomb addressed to Bruce. The Riddler leaks evidence that Thomas, who was running for mayor before he was murdered, hired Falcone to kill a journalist for threatening to reveal details about Martha and her family's history of mental illness. Bruce, who grew up believing his father was morally upstanding, confronts Alfred, who maintains that Thomas only asked Falcone to threaten the journalist into silence; Thomas planned to turn himself and Falcone over to the police once he found out Falcone murdered the journalist instead. Alfred believes that Falcone had Thomas and Martha killed to prevent this.

Selina reveals to Batman that Falcone is her neglectful father. She decides to kill him after learning that he strangled Annika because Mitchell told her that Falcone was the informant. Batman and Gordon arrive in time to stop her, but the Riddler kills Falcone as he is being arrested. The Riddler is unmasked as forensic accountant Edward Nashton and is incarcerated in Arkham State Hospital, where he tells Batman he took inspiration from him when targeting the corrupt. Batman learns that Nashton has stationed car bombs around Gotham and cultivated an online following that plans to assassinate mayor-elect Bella Reál.