Present Day: While Batman is busting one of his illicit operations, gangster Chuckie Sol attempts to make his getaway on wheels from a high-rise parking garage. He is confronted by a shadowy figure in a cape, which he assumes to be Batman. However, it is instead a different costumed figure, with a deep, echoing voice, a death's head mask, and a vicious blade on the end of one arm. A frightened Chuckie tries to run down the new threat, but as his target disappears in a cloud of smoke, Chuckie instead smashes through the wall of the parking structure and crashes into an adjoining building, dead on impact. Witnesses note Batman's arrival on the scene, and most jump to the conclusion that the vigilante has finally let one of his normally non-lethal pursuits go too far.
The Batman is still a mysterious and frightening figure to much of the public at this time. Fueling the anti-Bat bias is councilman Arthur Reeves, a vocal opponent of the Batman's methods and a major thorn in the side of Commissioner James Gordon. Reeves goes over Gordon's head to recruit police officers who share his distaste for the Dark Knight's activities.
Meanwhile, Andrea Beaumont flies into Gotham City, contacting her old friend Reeves, who asks Andrea about an old acquaintance of hers: Bruce Wayne. She dismissively calls the relationship "ancient history," but a flashback tells a different story...
Before the Bat: While visiting his parents' grave, a young Bruce Wayne overhears a younger (likely between 16 and 18) Andrea visiting her mother's, talking to her as though she is still alive. The two strike up a conversation, and sparks immediately fly.
Bruce has spent the last fifteen years of his life training himself to fight injustice, and is now very close to beginning the fight. That night, he dons a ski mask and confronts a group of thieves hijacking a truck of goods. When he yells at the crooks to surrender, they laugh at him and attack. Bruce's martial arts training and advanced equipment make short work of the thugs, and he is elated to see that his training has paid off. Then the remaining thug starts up the truck, and a simple job becomes a high-speed chase on the highway, ending in a crash that nearly kills Bruce and his quarry.
The next morning, Bruce is recuperating and relentlessly practicing his jiu-jitsu on the lawn. He says "The Plan" has gotten off to a good start, but he needs a way of striking fear into his enemies.
Andrea visits, tired of waiting for Bruce to call. To his surprise, she shows him a few moves of her own, and they end up in a tangle on the ground. Laughing, he kisses her, and Alfred turns away discreetly...
Present Day: Gangster Buzz Bronski, an old associate of Chuckie Sol's, visits his grave at night and drops a desultory wreath by the headstone. But then Bronski is confronted by the same mysterious figure and chased through the graveyard, yelling for his bodyguards. Buzz falls into an open grave, and the statue above it is tipped inside, crushing him to death. His bodyguards arrive in time to see his remains, and a figure in a cape disappearing over the next rise.
The next day, headlines confirm eyewitness accounts that Batman has turned to killing. Commissioner Gordon refuses to believe it, and tells Reeves that he will have no part in his crusade.
While spying on Reeves and Andrea having dinner, Batman has another flashback:
Flashback: Bruce and Andrea have been dating for a while now, and tour the Gotham World's Fair together. Afterwards, Andrea takes him to meet her father, Carl Beaumont, a high-powered Gotham businessman (Bruce also meets a young Reeves, a hotshot lawyer in Beaumont's company). Bruce receives Carl's stamp of approval, but their meeting is crashed by shady mobster Salvatore Valestra. Excusing themselves, Bruce and Andrea see a street performer being harassed by a motorcycle gang. Bruce tells Andrea to stay put, and leaps into the fray. With his training, he easily knocks out two of the gang, but, catching sight of Andrea's terrified expression, he becomes distracted for a crucial second, and takes a blow to the chest that knocks him to the ground, allowing the gang to escape with the performer's money box.
That evening, Bruce paces Wayne Manor in agitation: he has realized that he can't have it both ways, he has to choose between Andrea and his vow to fight crime. During a rainstorm, he goes to his parents' grave, and begs to be released from his vow: when he made it, he never expected that he could find happiness with someone else. No answers come from his parents' tomb, but Andrea, who knows him very well by now, appears next to him and gives him the answer he needs.
Present Day: Valestra, now old and in failing health, panics on seeing the headlines about Sol and Bronski's murders, and meets Reeves in private, asking him to confirm that the Batman is hitting "our people." Reeves confirms it, but hastily excuses himself, feeling he doesn't need Valestra anymore.
Batman, investigating possible connections between Sol and Bronski, finds that they were partners in several joint ventures, along with Valestra. Finding his past resurfacing, Batman examines old photos of the three gangsters, one of which includes Carl Beaumont.
Flashback: on the cliff overlooking the sea behind Wayne Manor, Bruce proposes to Andrea. She is astonished - she never really believed that Bruce would choose her over "The Plan," but Bruce declares that whatever plan he has for his life, she is now part of it. They embrace, but are interrupted by a swarm of bats erupting from a hole in the ground.
Bruce drops Andrea off at her home, where she notices other cars parked outside, and Valestra's "chauffeur" standing watch outside the door.
The next morning, Bruce climbs up from exploring the cave under the Manor, which is much more extensive than he'd though. Alfred is waiting, and regretfully gives Bruce a message: Andrea, returning his ring, saying she has to go away, and telling him to forget her.
Heartbroken, and having nothing left to hold him back, he adopts a new, terrifying appearance as "Batman," and resumes his crusade.
Present Day: Seeing no other choice, Valestra goes, alone, to meet The Joker, with whom he has some past history. Valestra offers to hire him to kill Batman. Joker appears not to be interested, but Valestra angrily reminds him that "his hands are just as dirty" as theirs, and he is likely Batman's next target. Joker loses his temper briefly, then laughs assures his "old pal" that Batman will never hurt him...
Batman confronts Andrea in her hotel room, demanding to know what she knows about the gangster murders. She claims ignorance, then coldly orders him out of the room. As he starts to leave, he spitefully asks her whether she's still following her dad's orders. She retorts that he's the only one in the room being controlled by his parents - apparently she knows who he really is. But as soon as he's gone, she collapses onto her bed, sobbing uncontrollably.
Later that night, the shadowy vigilante enters Valestra's mansion to execute him, only to find he is too late: Valestra has been poisoned by Joker gas. Sitting in his lap is a surveillance camera, and a radio from which comes Joker's voice. Sheepishly, he admits that he messed up, and the mysterious vigilante isn't Batman after all. Realizing the danger, the Phantasm leaps from the building's window just as the package in Valestra's lap explodes.
Batman confronts the vigilante, chasing him across several rooftops, but is then confronted by a police task force with orders to arrest him. Batman flees, and is pursued into a construction site by a tactical squad under Harvey Bullock's command. Seeing Batman above, one over-eager officer empties his submachine gun at the building, hitting a propane tank and igniting an explosion that knocks Batman senseless. He is forced to buy time by removing his cape and cowl and sending them flying up towards the police helicopter, distracting the task force while he escapes to the ground floor. Now unmasked, and severely dazed by the explosion, he stumbles to the end of an alley, with the police right behind him, and no means of escape... until Andrea appears in her car and tells him to get in. Bruce jumps in and she speeds away, leaving the police behind.
That evening, Andrea tells him what really happened the last night they saw each other:
Flashback: Andrea returned home to find her father in the clutches of three mobsters: Sol, Bronski, and Valestra. Beaumont had been doing business with them, but now they've discovered that he's been embezzling, and he must die. Beaumont begs for one more chance, saying that he can return their money, with interest by no later than the next day. Valestra agrees to give him that one last chance. But as soon as they are gone, Beaumont tells Andrea they must leave town immediately; the money will actually take weeks to free up, and Valestra won't wait. Andrea pleads that she and Bruce have just become engaged, but Carl tells her that they will both be dead by the next day if they don't escape. Anguished, Andrea asks why her father has ruined both their lives, and Carl swears that he will make things right again...
Present Day: Andrea fills in the rest of the story; she and Carl escaped to Europe, and Carl was eventually able to pay back the gangsters' money, with interest, but they still wanted revenge.
Bruce reaches the obvious conclusion: Carl had to find another way to rid himself and Andrea of the mobsters, so he has been hunting them down, one by one. Realizing that Andrea had no choice but to leave him, he remembers his love for her, and the two spend the night together.
The next morning, he sees her off. Alfred is happy for his master, but Bruce is unsure whether he can still make the same choice he made ten years before. But while he is looking over the photo of Carl Beaumont and the three gangsters, he realizes something: Valestra's thug, standing in the background, is none other than the Joker before his transformation!
In his office, Reeves fumes about the police's failure to catch Batman, but is confronted in secret by the Joker. The Joker now has his own pet theory: that Reeves has hired the mysterious vigilante to wipe up the traces of his dealings with Valestra and the mob - which means that, according to that theory, Joker himself is next on Reeve's list. Flustered, Reeves denies it, but then Andrea telephones his office to cancel their dinner date. Needing no further proof, Joker stabs Reeves with a needle, injecting him with a slow-acting version of his Joker toxin.
Reeves is rushed to the hospital, laughing hysterically. A doctor sedates him, warning him that he has to stay calm in order to let the toxin run its course. But as soon as he is alone, Batman confronts him, wanting to know what Joker wanted. In his agitation, Reeves confesses though hysterical laughing: Beaumont enlisted his help in getting himself and Andrea out of town, and kept quietly in touch over the years. Later, when Reeves was running for office for the first time, Beaumont refused his pleas for financial assistance, and Reeves, broke and desperate, sold Beaumont's whereabouts to the mob.
Realizing the truth, Batman rushes to Andrea's hotel room, which is empty. Then the Joker calls the room, telling her he's sending her a gift, "airmail!" Batman looks out the window and sees a toy plane flying towards the window, carrying a bomb. Batman manages to detonate it before it gets inside.
Outside the Joker's hideout, in the ruins of the World's Fair, Andrea remembers what brought her to this point:
Final Flashback: Andrea returns home from grocery shopping, to see Valestra's thug (now the Joker) emerging from the house. He walks past her without saying a word, and she rushes inside to find her father murdered.
Present Day: Andrea, the mysterious vigilante, confronts the Joker. He manages to distract her and escape the room, and lure her into the path of a gigantic aircraft engine, which sucks her off her feet and nearly kills her, before Batman arrives on the scene in a Batcycle and crashes it into the engine rotors, destroying it.
Batman confronts Andrea: he now knows her father is dead, and Andrea has been killing his tormentors, one by one. She says she has nothing left except her revenge on the men who ruined their lives. But he pleads with her to leave, and let him apprehend Joker his way.
Elsewhere, Joker starts a countdown to blow up the entire complex. Batman's pursuit of Joker takes him through the old exhibitions, and Joker distracts him with a set of boobytraps, long enough to don a jetpack and helmet and fly into the sky. But Batman jumps onto his back and yanks him off course, causing them both to crash, leaving them exhausted.
Then Andrea reappears and grabs hold of Joker. Batman pleads with her to run, but she says, no: "Goodbye, my love." The bombs explode, and the entire complex begins to burn. Joker begins laughing maniacally, and both he and Andrea disappear in a cloud of smoke. Before he can follow them, the ground collapses under Batman and he falls into a sewer line, which carries him away from the inferno.
In the Batcave, Bruce laments that he was unable to save Andrea. Sadly, Alfred tells him that Andrea was beyond redemption. Then Bruce notices a glint in the distance, and finds a locket that belonged to Andrea weged in a nook in the cave wall: inside is a picture of her and Bruce. Desolate, Bruce realizes that she must be alive, but is still lost to him.
On a cruise ship out at sea, one of the passengers notices an attractive woman standing alone at the rail. He starts to introduce himself, but notices her cold greeting, and mourning veil.
"Do you want to be alone?" he asks. "I am," Andrea replies.
Batman stands on a rooftop overlooking the city, as he has countless times before. Whether by fate or by design, it seems he cannot escape his purpose. Seeing the Bat-Signal light up the sky, he throws off his reverie, and swings into the night.