Prologue New Arkham City inmate and rising warlord, Two-Face devises a plan to publicly execute fellow prisoner Catwoman after she tries to steal back some of her ill-gotten gains from his hideout. Meanwhile, Gotham City itself has degenerated into a police state managed by Mayor Sharp, where citizens with the slightest trace of a criminal record find themselves shipped to the prison district. Those who dare to challenge Sharp's policies are the target of arranged disappearances, becoming political prisoners trapped behind Arkham's walls. Among these is Bruce Wayne, who holds a rally attacking the proposal of turning half his city into a walled-off reserve for criminally inclined persons. Segregated from society, he argues, they have become responsible for their own survival in an anarchic urban hell which is characterized by bloody gang wars.

Welcome to Arkham City Wayne, as the latest focus of Sharp's vendetta, is kidnapped by TYGER Security operatives working for Hugo Strange, who is privy to his dual identity as Batman. Strange intends to unveil new plans for Arkham City before the night is up, an operation codenamed Protocol 10, which will establish himself as supreme ruler of Gotham. Now an inmate, the Dark Knight manages to have Alfred Pennyworth deliver his crimefighting equipment to him directly via an airdrop, and he prepares to save Catwoman from Two-Face for the sake of their past relationship while uncovering the true nature of Protocol 10.