The game starts with Batman driving up to the legendary Arkham Asylum with The Joker strapped into the passenger seat. Batman hauls Joker into the Asylum and insists on accompanying the guards as they escort Joker to his cell as he thinks Joker allowed himself to be captured. Joker enjoys taunting both Batman and the guards even though he is strapped to a gurney Silence of the Lambs style. There are some electrical problems but they are brushed off as nothing. As you escort Joker, you find out that there was a fire at Blackgate Prison so a lot of prisoners were transferred to Arkham including Joker’s men. You descend into the bowels of Arkham where it is revealed that Harley Quinn is free and has taken control of Arkham’s security system. Joker has made a deal with a corrupt guard which has allowed him unfettered access to the asylum. They kidnap Commissioner Gordon and announce that there are bombs planted across the city that will go off should anyone try to enter the asylum grounds.
Batman chases after Harley Quinn first as she has Gordon captive in the medical wing. In fact, Joker’s men have captured all of the doctors and nurses in the wing. Batman must rescue them as he searches for Harley. Batman follows Harley’s trail to the morgue where he finds out that Jonathan Crane aka The Scarecrow is also loose. He turns a corner and finds Gordon violently murdered and slumped against a wall. Batman tries to contact Barbar Gordon aka Oracle to break the news to her but gets no answer. He is forced to move on to continue his pursuit of Harley and Joker as the walls seem to stretch and crumble around him. He enters the morgue proper and finds three body bags. He opens the first two body bags and finds his mother and father whose corpses blame him for their deaths. He moves to open the third body bag and out pops Scarecrow who hits him with concentrated fear gas which plunges Batman deeper into a nightmare.
Batman comes to in a surreal dreamscape as he is hunted by an impossibly tall Scarecrow. Batman must use stealth to navigate the gauntlet laid out for him and shine a light on Scarecrow’s avatar to return to reality. Shaken, Batman discovers that a guard’s body is where Gordon was and he can’t trust anything he saw while under the effects of the fear gas. With the actual Scarecrow nowhere in sight, Batman moves on to continue his pursuit, feeling that Gordon can still be saved.
Batman locates and temporarily subdues Harley but Joker releases Bane who is somehow even more juiced than he usually is. The fight is difficult and Batman must focus on removing the shunts used to pump Venom into Bane rather than attack the big man himself. Batman barely survives the ordeal as Bane chases him back up to the surface. Batman activates the Batmobile remotely and uses it to plow into Bane and launch him into the waters of the Gotham harbor, confident that Bane will survive. However, something was very wrong with Bane and Batman deduces that it is probably connected to Joker’s reason for returning to the asylum.
With Gordon finally rescued, Batman retreats to a small Batcave that he secretly installed under Arkham to restock his gadgets and use the computer to figure things out. He discovers that warden Quincy Sharp had hired Dr. Penelope Young as part of Arkham’s new research facility in an effort to cure the patients once and for all. However, Joker’s intricate plan started with manipulating Dr. Young into experimenting with Venom, eventually creating a plant-based hybrid called Titan. This new chemical, which caused subjects to gain enormous strength but also uncontrollable rage, was Joker’s plan to destroy Gotham and finally eliminate the Batman problem. However, Young finally realized that she was being played and refused to cooperate further which prompted Joker to return to the asylum and enact his plan there. The plan is now clear Batman must prevent Joker from getting his hands on Titan and part of that is finding Dr. Young.
Batman begins to track Dr. Young and rescues hard-nosed guard Aaron Cash who rallies the rest of the still-living guards and gives Batman clues about Dr. Young’s whereabouts. Batman is momentarily sidetracked by another dose of Scarecrow’s fear gas which leads to him reliving his parent’s murder in Crime Alley. While tracking her further, Batman finds the Titan formula and burns it. He finds Dr. Young who has been taken hostage by Victor Zsaz in the warden’s office. After rescuing her, she reveals that she was trying to get another copy of the formula out of the office’s safe. When they open the safe, a Joker bomb goes off which instantly kills Dr. Young. What’s worse, is there are already completed batches of Titan and Joker has them already.
Batman once again tussles with Harley Quinn in a lengthy battle. After capturing her and sealing her in a cell, he tricks her into revealing that Poison Ivy is being used to manipulate plants in the asylum’s botanical gardens to produce Titan. Batman heads that way to rescue her as she is an unwilling participant. She tells Batman that she can help produce an antidote to Titan but the rare spore she needs is located in the sewers under the asylum. Specifically, the spores are in the lair of Killer Croc.
Batman descends into the sewers and is ambushed once again by Scarecrow. This time Scarecrow injects Batman with a pure liquid dose of his fear toxin. Batman and the video game itself have a breakdown in perfect fourth wall shattering style. The opening of the game is repeated but this time it is Batman who is strapped to the gurney and the player plays as Joker, escorting his foe to a cell. The villains are in control and Batman and his allies are now the inmates. Once again, Batman breaks through the illusion and finally gets to face Scarecrow one on one in a fair fight. This causes Scarecrow to flee and Batman watches Scarecrow get mauled by Croc before he can save the demented villain.
Batman sneaks into Croc’s lair and must use stealth and patience to avoid Croc who is swimming in the water all around. In a very lengthy and tense sequence, Batman repels Croc by activating the shock collar still barely hanging on to the beastly man’s neck. Batman is able to synthesize one dose of the antidote before plants destroy his setup.
Batman returns to the botanical gardens to discover that Ivy has been injected with Titan, causing her to lose control and mutate. Batman fights the new monstrous version of Poison Ivy and is able to subdue her.
The Joker lays a trap for Batman and captures him. On the roof of the asylum, Batman and the Joker face each other. Batman is exposed to Titan while Joker gives himself a heavy dose. The two fight like gladiators with Joker succumbing more and more to the Titan as Batman resists. Batman eventually uses the antidote on himself before beating Joker with the classic Batman combination of gadgets, cleverness, and fists. With Joker defeated, the effects of Titan start to wear off on all those who were dosed. Backup arrives and the Joker is finally arrested for real as he is utterly spent by the battle and the toll Titan took on his body. Batman rushes off to stop a crime in progress committed by Two-Face.
