As a child in Gotham City, Bruce Wayne falls down a dry well and is attacked by a swarm of bats, developing a fear of bats. Attending the opera with his parents, Thomas and Martha, Bruce becomes frightened by performers masquerading as bats and asks to leave. Outside, mugger Joe Chill murders Bruce’s parents in front of him, and the orphaned Bruce is raised by the family butler, Alfred Pennyworth.
Fourteen years later, Chill is paroled after testifying against mafia boss Carmine Falcone. Bruce intends to murder Chill, but one of Falcone’s assassins does so first. Bruce’s childhood friend Rachel Dawes berates him for acting outside the justice system, saying that his father would be ashamed. After confronting Falcone, who tells him that real power comes from being feared, Bruce spends the next seven years traveling the world training in combat and immersing himself in the criminal underworld. In a Bhutan prison, he meets Henri Ducard, who recruits him to the League of Shadows led by Ra’s al Ghul. After completing his training in ninja methods and purging his fears, Bruce learns the League intends to destroy Gotham, believing the city is beyond saving. Bruce rejects the League and its edict that killing is necessary, burning down their temple during his escape. Ra’s is killed by falling debris, while Bruce saves the unconscious Ducard.
Returning to Gotham intent on fighting crime, Bruce takes an interest in his family’s company, Wayne Enterprises, which is being taken public by the unscrupulous William Earle. Company archivist Lucius Fox, a friend of Bruce’s father, allows Bruce access to prototype defense technologies, including a protective bodysuit and a heavily armored vehicle, the Tumbler. Bruce poses publicly as a shallow playboy, while setting up a base in the caves beneath Wayne Manor and taking up the vigilante identity of “Batman”, inspired by his childhood fear.
Intercepting a drug shipment, Batman provides Rachel with evidence against Falcone and enlists Sergeant James Gordon, one of Gotham’s few honest cops, to arrest him. In prison, Falcone meets Dr. Jonathan Crane, a corrupt psychologist whom he has helped smuggle drugs into Gotham. Donning a scarecrow mask, Crane sprays Falcone with a fear-inducing hallucinogen and has him transferred to Arkham Asylum. While investigating “the Scarecrow”, Batman is incapacitated by the hallucinogen, but is saved by Alfred and given an antidote developed by Fox.
When Rachel, now the city’s assistant district attorney, accuses Crane of corruption, he reveals he has introduced his drug into Gotham’s water supply. He drugs Rachel, but Batman subdues and interrogates Crane, who claims to work for Ra’s al Ghul. Batman evades the police to get Rachel to safety, administering her the antidote and giving her a vial of it for Gordon and another for mass production. At Bruce’s birthday party, Ducard reappears and reveals himself to be the true Ra’s al Ghul. Having stolen a powerful microwave emitter from Wayne Enterprises, he plans to vaporize Gotham’s water supply, rendering Crane’s drug airborne and causing mass hysteria that will destroy the city. He sets Wayne Manor aflame and leaves Bruce to die, but Alfred rescues him.
Ra’s loads the microwave emitter onto Gotham’s monorail system to release the drug at the city’s central water source. Batman rescues Rachel from a drugged mob and indirectly reveals his identity to her. Confronting Ra’s on the monorail, as Gordon uses the Tumbler’s cannons to destroy a section of the track, Batman refuses to kill Ra’s but chooses not to save him, gliding from the train as it crashes, killing Ra’s.
Bruce gains Rachel’s respect and love, but she decides she cannot be with him now, telling him if Gotham should no longer need Batman, they can be together. Batman becomes a public hero and Bruce reveals he has purchased a controlling stake in Wayne Enterprises, firing Earle and replacing him with Fox. Sergeant Gordon is promoted to Lieutenant and shows Batman the Bat-Signal, mentioning a criminal who leaves behind Joker playing cards.