Mayor Borg orders District Attorney Harvey Dent (Billy Dee Williams) and Gotham Police Department Commissioner Edward Grogan (Christopher Walken) to increase police activity and combat crime in preparation for the city’s Halloween festival. Gotham Globe Reporter Alexander Knox (Robert Wuhl) and photojournalist Vicki Vale (Kim Basinger) begin to investigate reports of a vigilante named Batman who is terrorizing Gotham’s criminals.
Corrupt policeman Arnold Flass (William Hootkins) and a group of officers attacked Sergeant James Gordon (Pat Hingle) since Gordon refused to associate with them. But Batman was able to save Gordon’s life. That enraged Flass’ employer who is Carl Grissom, the head of Axis Chemicals who secretly lead a gang of criminals.
During a party, Bruce is introduced to reporter Vicki Vale (Kim Basinger) who is investigating the legend of Batman. Bruce takes a liking to Vicki and manages to ask her out on a date before he is summoned by Alfred, who reveals to him that there is trouble at the local Axis Chemical Factory.
Gotham kingpin Carl Grisson (Jack Palance) has learned, to his shock, that his own mistress, Alicia Hunt, is having an affair with his right hand man, Jack Napier. He sends Napier to raid the factory but then sends the corrupt detective Arnold Flass (Max Hootkins) to catch Napier. Gordon, also at Bruce Wayne's party, learns of the trouble and heads after Flass.
Once he realises that he has been betrayed, Napier shoots Flass dead and a shootout begins between him and Gordon, although Batman intervenes and saves Gordon. Napier tries to shoot Batman but the hero uses his steel enforced gauntlets to deflect the bullet back at Napier, who dodges it but it breaks a valve, causing acid to spray all over Napier's face. Napier then takes a fall into a chemical vat, but not before Batman looks into his eyes and recognizes him as the man who killed his parents.
Although presumed dead, Napier actually survives but his skin has been bleached white, his lips red and his hair green. Dressing in a colourful suit, he returns to Grissom, who is suitably shocked that Napier survived. Napier, using the alias of The Joker, murders Grissom, takes, takes control of his criminal empire, and eliminates other mob bosses who stand in his way.
Using the chemical factory, the Joker creates a deadly new weapon which he calls Smilex; he chemically alters everyday hygiene products, which causes those using a certain combination to laugh to death. He soon has the entire city at his mercy while ignoring Alicia, who desperately wants to spend time with him.
Alicia decides that the only way to make the Joker love her is to kill Batman, which she attempts to do by feeding him to a school of piranhas. Batman distracts her by telling her that the Joker had been using her from the start, and that Joker's stories of an unhappy childhood were lies. When she tearfully insists that Joker really loves her, Batman convinces her to call Joker so that he will know she accomplished her goal (as the piranhas would leave no convincing evidence other than bones and a tattered costume which anyone can fabricate). When Joker arrives, however, he is infuriated that Alicia would try to kill Batman herself and knocks her out a window despite her pleas for mercy by claiming she was pregnant. Joker then frees Batman from Alicia's trap and left. Batman realizes from this encounter that Napier is the Joker and that he murdered his parents.
Meanwhile, Vicki has been pursuing her investigation and has figured out that Bruce is Batman, but agrees not to make the information public. They plan to be together, but Bruce informs her that first he must defeat the Joker.
During the annual parade through Gotham's streets, the Joker creates a distraction for the police at the chemical factory, which Batman then destroys. However, the Joker has meanwhile taken control of the parade and lures the citizens to him by dispensing money, but in actuality plans to burst the balloons which contain a deadly laughing gas. Batman arrives just in time and uses the Batwing to loosen the balloons moorings, causing them to float away. In the chaos, the Joker takes Vicki and drags her into Gotham Cathedral, while Batman and Gordon clear off the thugs remaining on the parade float.
With the police surrounding the cathedral on the ground, Batman follows the Joker to the spire and confronts him. After a brutal fight, the Joker's escape chopper arrives and Batman and Vicki and knocked over the edge, leaving them dangling. Batman manages to shoot a grappling hook into the chopper's rotary blades, causing it to lose control and crash into a large gargoyle statue, exploding upon impact. The Joker and his men perish in the fireball.
Before Gordon unveils the Bat Signal. Harvey Dent reads a letter from Batman, promising that he will always defend Gotham. In the coroner's office, Alicia's lifeless body was getting an autopsy and everyone gets shocked to discover she actually was pregnant. The baby almost fell of the table until she was caught by the doctor.
Micheal Keaton-Bruce Wayne/Batman
Robert Whul-Alexander Knox
Kim Basinger-Vicki Vale
Pat Hingle-Lieutenant James Gordon
Billy Dee Williams-District Attorney Harvey Dent
Micheal Gough-Alfred Pennyworth
Christopher Walken-Commissioner Edward Grogan
Jack Palace-Carl Grissom
Jack Nicholson-Jack Napier/The Joker
Jerry Hall-Alicia Hunt
William Hootkins-Sergeant Arnold Flass