This action-oriented fantasy thriller delves into the very beginning of the transformation of a young boy into a superhero. As a child, Bruce Wayne falls into a well, where he is attacked by a swarm of bats; he subsequently develops a fear of bats. While watching an opera with his parents, Bruce is frightened by performers masquerading as bats, and asks to leave. After the family leaves they are targeted by a mugger, Joe Chill, who murders Bruce's parents, leaving him to be raised by the family butler, Alfred Pennyworth.
Fourteen years later, Chill is granted parole in exchange for testifying against Gotham City mafia boss Carmine Falcone. Bruce intends to murder Chill in revenge, but one of Falcone's assassins does so first. Bruce's childhood friend, assistant district attorney Rachel Dawes, berates him for attempting to subvert the legal system, telling Bruce that his father would be ashamed.
Bruce confronts Falcone in a nightclub, where Falcone demonstrates that real power comes from being feared. Bruce decides to travel the world, learning new skills. As an unidentified criminal, Bruce is arrested for stealing property belonging to his own company and incarcerated in a Bhutanese prison, where Henri Ducard offers to train him in the arts of stealth and fear as a member of the League of Shadows, led by Ra's al Ghul. After completing his training,
Bruce learns the League intends to destroy Gotham, believing it to be corrupt and beyond saving, having done so with other cities for centuries. Bruce refuses to aid their crusade and causes a fire that burns down the League's temple. Ra's is killed by falling debris, while Bruce saves an unconscious Ducard.
Bruce returns to Gotham posing as a billionaire playboy. He takes an interest in his family's company, Wayne Enterprises, which is now run by the unscrupulous William Earle. Bruce meets Wayne Enterprises's top scientist, Lucius Fox, who shows him various prototype technologies, including the Tumbler and a protective bodysuit.
Taking these, Bruce finds an entrance to the cave under his well, confronts his fear of bats, and creates a workshop, taking up the identity of "Batman". As Batman, he intercepts a drug shipment and provides Rachel with evidence to indict Falcone, empowering the honest Sgt. James Gordon and the Gotham police to arrest the previously untouchable criminal.
Falcone and his henchmen are declared mentally unfit for trial and transferred to Arkham Asylum by the corrupt Dr. Jonathan Crane, who had been using Falcone to import a drug that causes terrifying hallucinations. Crane exposes Falcone to the toxin while wearing a burlap mask, driving Falcone insane with fear of the "Scarecrow" in order to keep Falcone in Arkham. While investigating Crane, Batman is also exposed to the drug, set on fire, and thrown out an open window into an alleyway, but is rescued in time by Alfred and given an antidote by Fox.
Rachel goes to Arkham, where Crane reveals that he has been dumping the toxin into Gotham's water supply before dosing her with it. She is rescued by Batman, and they escape in the Tumbler, inoculating her and giving her two vials of the antidote, one for Gordon and one for mass production. Meanwhile, Gordon finds out that the compound has been laced into the entire city's water supply, but can only cause harm if inhaled.
At his 30th birthday celebration at Wayne Manor, Bruce is confronted by Ducard, who reveals himself to be the real Ra's al Ghul. Bruce expels his guests so they will be safe, leaving him alone with Ra's and his men. Ra's reveals that the League has employed Crane and stolen a powerful microwave emitter from Wayne Enterprises, intending to vaporize the city's water supply so that the toxin will trigger mass hysteria and violence.
The League sets fire to the mansion, and Bruce is saved by Alfred, who takes him down into the Batcave before the mansion collapses from the fire. As the League begins unleashing the toxin, Batman rescues Rachel from a mob and indirectly reveals his true identity to her before pursuing Ra's onto the monorail train that is carrying the emitter toward the city's main water distribution center.
Gordon uses the Tumbler's cannons to destroy a section of the track. Batman overpowers Ra's and says that he will not kill him, but that he does not have to save him, either, before escaping from the train car, leaving Ra's to die as the train collapses and explodes.
Batman becomes a public hero, but loses Rachel, who cannot bring herself to love both Bruce and Batman. Bruce buys a controlling stake in the now publicly traded Wayne Enterprises, fires Earle, and replaces him with Fox. Gordon — now promoted to Lieutenant of the Gotham Police Force — shows Batman the Bat-Signal and mentions a criminal who leaves Joker playing cards at crime scenes. Batman promises to investigate and disappears into the night.