A police blimp is flying over Gotham City. A blip ghosts across the radar screen, then the pilot sees something that looks like bat wings fly past the cockpit window. The blimp rises above the clouds, but they see nothing. We flash to the skyline of Gotham, and see a shadow of a giant bat creature flying past against the buildings. The scene changes to outside of the Shreck Pharmaceuticals. Inside, a guard is patrolling and making a demo tape for a radio ad on a micro-cassette recorder. He hears a crash and goes to investigate. At first he sees nothing, but then a shadow of a giant bat passes over him. The guard is attacked by the beast and drops his recorder under the desk. The guard tosses a chair through the window, and then the bat picks him up and tosses him out and into the river below. The next day, Commissioner Gordon meets with Mayor Hamilton Hill and District Attorney Harvey Dent to discuss a police raid to capture Batman. Detective Harvey Bullock asks Hill for permission to form his own tactical squad, but Gordon has already denied it. Hill authorizes the strike force, reminding Gordon that Bullock has a reputation for catching his man. Dent promises to put Batman in jail if Bullock catches him and asks Gordon to look into Oswald Cobblepot, who has taken over Carl Grissom's operations ever since he was killed by the Joker.
At the docks, a group of drug smugglers are bringing in drugs only to be attacked by the mysterious Cat Woman, a mysterious woman who fashions a black vinyl costume and whip. Cat Woman kills off all the drug smugglers and makes it look like that the Batman did it. Gordon arrives to arrest Oswald Cobblepot (Danny Devito) for it at his night club and Cobblepot rudely vows that Gordon will never get anything on him. Cobblepot also explains that he has enough influence to make him to go back to being a beat cop.
After Gordon angrily walks away from Cobblepot, it cuts to Wayne Enterprises. Inside, Bruce Wayne is having a meeting with Max Shreck, the owner of Shreck Pharmaceuticals, with Shreck claiming the bat creature was one of Bruce's creations, due to the fact there have been rumors of Bruce's men exerpimenting on animals.. Bruce denies everything Shreck is saying, and Shreck leaves in a huff. However, Bruce then goes to a lab in Wayne Enterprises, which is very dark, cold and full of bats. Bruce marches to the back of the lab, where he meets with Dr. Kirk Langstrom about the bat creature. Langstrom claims he has nothing to do with the beast, but Bruce points out the fact Langstrom experimented on a bat and ended up making it grow twice its size. Bruce then threatens that if he finds out Langstrom did this to another living creature he will fire him, much to Langstrom's shock. As Bruce leaves, an enraged expression falls on Langstrom's face, as he opens up a freezer and grabs a strange green serum.
Believing he's been set up, Batman investigates and finds out there were two similar robberies at pharmaceutical companies. Batman infiltrates Shreck Pharmaceuticals, gasses a police guard unconscious and crosses the police line into the scene of the crime. Bullock receives the call from Dispatch, and then calls in his special task force to convene on the building. While the task force scrambles to his location, Batman sprays the room down to search for clues. He locates a set of footprints belonging to last night's guard, and then finds the micro-cassette recorder underneath the desk. He takes pictures of a shattered jar, and examines some sort of hair, but is interrupted by the arrival of the task force. Bullock sends his men into the building just as Gordon arrives. Bullock is sure they'll catch Batman, but Gordon says another pharmaceutical company was robbed across town. The task force arrive, but they are killed when Cat Woman is firebombing Shreck's company. After a fight in which Batman knocks her off a building, Catwoman survives by landing in a truck full of kitty litter.
Bruce and Alfred begin an ivestigation on both the creature and Catwoman. However, nothing comes up, so Bruce goes out to get information himself. A few criminals are just sitting around, talking to each other about all the "freaks" who have been showing up in Gotham as of late. One of the criminals is suddenly taken by an unknown person, who the criminal thinks is Batman. However, it turns out to be the creature, which the criminal describes as a "Man-Bat". The Man-Bat is about to bit the criminal's neck, when Batman shows up and stops it. Batman and Man-Bat then fight, which ends with Man-Bat beaten. Man-Bat tries to fly away, but Batman grapples on to its leg, and manages to get a blood sample from it before Man-Bat shakes him off. Later, back at the Batcave, Bruce tests the blood and finds out something strange, there is some human DNA in Man-Bat's blood.
The next day, Bruce Wayne arrives to see Dr. Langstorm. Bruce explains that he's there about a possible bat problem, since he keeps hearing squeaks from his chimney. Langstorm launches into a tirade against people who treat bats like pests, but his wife and assistant, Francine, calms him down. Bruce plays the recording of the bat noises for the Langstroms, but they don't recognize the sounds as a bat. Kirk takes the tape and promises to analyze it.
Cat Woman returns to her apartment and unmasks herself to be Selina Kyle. Selina remembers how she was Shreck's secretary and inadvertently discovers her boss's plan to release a virus in Gotham City that will make innocent cats and dogs into bloodthirsty predators. To protect his secrets, Shreck pushes her out of his office window. Falling through several canopies, Selina miraculously survives but lies unconscious in an alley. A group of cats swarm around her and she suddenly regains consciousness. Traumatized, Selina develops dissociative identity disorder and, after having a mental breakdown and trashing her apartment, she fashions a black vinyl costume and whip, becoming the formidable Catwoman.
Batman has decided to analyze the sound himself, but he can't find a match either. Langstorm calls at that moment, and lets Bruce know that he has brown bats in his chimney, but they'll leave as it gets colder. However, since Batman has already ruled out brown bats as being the source of the hair, and the sounds weren't recorded near his chimney anyway, Batman becomes suspicious. After running a computer scan of the noises, he decides that Langstorm is lying.
Langstrom is about to drink his serum, when Bruce bursts in. Bruce begins to yell at Langstrom about him lying, claiming that Langstrom will be fired if he doesn't reveal what's going on. When Langstrom refuses to talk, Bruce, like he said he would, fires Langstrom. After this, whatever was left of Langstrom's sanity snapped, and he drunk every serum in his freezer. He then turned to Bruce, as he slowly and painfully turned in to the Man-Bat. Man-Bat attempts to attack Bruce, with it being clear Man-Bat has no human thoughts or feelings. However, after a short fight, Man-Bat gets bored and smashes out of a window, flying off in to the distance. Bruce then turns to see the other Langstroms stairing at him, saying that they're sorry.
Meanwhile, at a meeting between Oswald Cobblepot and a few other men, he explains that he is planning on running for Mayor of Gotham, become almost untouchable. However, one man at the meeting begins to panic, much to the confusion to Cobblepot and the others. Cobblepot is about to ask what's wrong, when Man-Bat smashes through a window on the roof. The man panic and run out of the room, but lock Cobblepot inside. Cobblepot braces himself as Man-Bat kills him by biting in to his throat and drinking his blood. After Cobblepot dies, Man-Bat flies out of the same window he came in.
Bruce soon discovers something else shocking. Langstrom was in the building Riddler, and Joker blew up. Bruce dresses up as Batman again and heads after Langstrom. Batman and Man Bat fight for a while until a cure drops in from Alfred. Batman jumps on Kirk's back curing him.
At the end credits Harvey Dent is about to justify against Sal Maroni. But Maroni fakes a coughing fit and throws acid at Harvey.