Tucker and Esther Cobblepot, an aristocratic couple, throw their deformed infant child into the sewers, feeling that Gotham City's high society would not approve after witnessing their son kill their pet cat. However, a flock of penguins living in the sewers rescue him and raise him.
33 years later, the child becomes the Penguin.
He kidnaps businessman Max Shreck,
blackmailing him into helping him become a citizen of Gotham using evidence of his corporate crimes. Meanwhile, Max discovers that his secretary, Selina Kyle,
has found out he is planning to build a power plant which will drain Gotham of its electricity. Max pushes her out of a window, ensuring that she will not tell anyone. However, a flock of alley cats lick her corpse, reviving her. She returns home, suffers a mental breakdown and makes a homemade black vinyl catsuit and becomes a costumed vigilante named "Catwoman".
Penguin sends one of his costumed henchmen to kidnap the mayor's baby while he "saves" him, becoming a hero to the people of Gotham. However, billionaire Bruce Wayne
is suspicious of the Penguin and discovers that he is the leader of the Red Triangle Circus Gang who commits crimes throughout Gotham. As Batman,
Bruce decides to protect Gotham from the gang. After Penguin discovers that his parents are dead and his name is Oswald Cobblepot, Max decides to make Penguin the mayor of Gotham because the current mayor will not approve of Max's power plant. To do this, the Penguin has the Red Triangle Circus Gang create a riot, causing the citizens to lose all faith in the mayor, but Batman stops it. During the riot, Catwoman vandalizes Shreck's Department Store to gain revenge on Max. When Batman and Penguin confront each other, she intervenes before the store blows up. Penguin escapes as Catwoman fights Batman. Batman pushes her off a rooftop, but a litter box on a truck saves her.
The next day, Penguin and Catwoman collaborate on a plan to kill Batman. Meanwhile, Bruce and Selina develop a romantic relationship. Penguin and Catwoman kidnap the actress chosen to turn on the Gotham City Christmas Tree Lights, framing Batman, even though the security was heightened by Commissioner Jim Gordon.
Batman finds her but Catwoman takes her to a rooftop where the Penguin releases a swarm of flying bats which make the actress retreat backwards, falling off, making her death seem like Batman's fault. Catwoman rejects the Penguin's advances, prompting him to try killing her. Batman enters the Batmobile and discovers that Penguin has control over it, due to a device Penguin's gang installed. The Penguin takes it on a devastating rampage, but Batman regains control over it, escaping death.
Batman, having recorded the Penguin's plans during the rampage, plays it during the Penguin's election speech, turning the people against him. Enraged, Penguin kidnaps all the first-born sons of Gotham, including Max Shreck. Batman saves all the babies, forcing the Penguin to execute an alternate plan to destroy the entire city with his penguin army. However, Batman foils the plan by luring the penguins back to the Penguin's sewer base. He briefly battles the Penguin, then pushes him into sewer water. Catwoman tries to kill Max, but Batman stops her and reveals himself as Bruce. Max shoots Batman, knocking him out. Catwoman claims that she has six of her nine lives left, although Max shoots her four times, leaving her with two lives. Catwoman kisses Max with an electrical taser between their lips and breaks an electric wire, creating an explosion which kills Max but Batman cannot find Selina's corpse. The Penguin emerges from the water, but chokes on his own blood from internal injuries from the fall and falls to the ground, dead. His emperor penguins hold a funeral for their former boss and drag his corpse into the sewer water, his resting place.
Afterwards, Alfred, Bruce's trusted butler;
drives Bruce home. Suddenly, Bruce spots Selina's shadow in an alley. He investigates the area, only finding her black cat Miss Kitty, taking her with him before exchanging Christmas wishes with Alfred.