The man who will become the Joker is an unnamed engineer who quits his job at a chemical company to become a stand-up comedian, only to fail miserably. Desperate to support his pregnant wife Jeannie, he agrees to guide two criminals through the chemical plant where he previously worked so that they can rob the playing card company next to it. During the planning, the police inform him that his wife has died in a household accident. Grief-stricken, the engineer tries to withdraw from the plan, but the criminals strong-arm him into keeping his commitment to them.
At the plant, the criminals make him don a special mask to become the infamous Red Hood. Unknown to the engineer, the criminals plan to use this disguise to implicate any accomplice as the mastermind and to divert attention away from themselves. Once inside, they encounter security personnel, a shootout ensues, and the two criminals are killed. The engineer is confronted by Batman who is investigating the disturbance.
Terrified, the engineer jumps into the chemical plant's waste pound lock to escape Batman and is swept through a pipe leading to the outside. Once outside, he discovers to his horror that the chemicals have permanently bleached his skin chalk-white, stained his lips ruby-red and dyed his hair bright green. This disfigurement, compounded with the man's misfortunes of that one bad day, drives him completely insane and marks the birth of the Joker.
The Joker, after emerging from the canal of chemical waste
In the present day, the Joker kidnaps Commissioner Gordon and imprisons him in a run-down amusement park, whose owner he has killed, and shoots Gordon's daughter Barbara (alias Batgirl). His henchmen then strip Gordon naked and cage him in the park's freak show. He chains Gordon to one of the park's rides and forces him to view giant naked photos of Barbara, hoping to drive Commissioner Gordon insane in order to prove that the most upstanding citizen can go mad after having "one bad day." Once Gordon has run the horrifying gauntlet, the Joker puts him on display in the freak show, ridiculing him as "the average man," a naïve weakling doomed to insanity.
Batman's attempts to locate Commissioner Gordon are unsuccessful until the Joker sends him a clue that leads him to the amusement park. Batman arrives to save Gordon, and the Joker retreats into the funhouse. Though traumatized by the ordeal, Gordon retains his sanity and moral code, and he insists that Batman capture the Joker "by the book" in order to show him that adhering to the legal process works. Batman enters the funhouse and faces the Joker's traps, while the Joker tries to persuade his old foe that the world is "a black, awful joke" and thus not worth fighting for. He also states that it takes only "one bad day" to turn an ordinary man insane, and taunts Batman by correctly speculating that it was one bad day where he lost a loved one at the hands of a criminal that drove Batman into becoming a vigilante.
Batman subdues the Joker and tells him that Gordon survived the Joker's torments. Batman suggests that the Joker is alone in his madness. He attempts to reach out to the Joker and offers to help him recover in order to end to their everlasting war, which Batman fears may one day result in a fight to the death. The Joker declines, saying it is too late. He then says that this situation reminds him of a joke and proceeds to tell the joke. Batman chuckles at the punch line, accompanying the Joker's maniacal cackling as the police arrive. The laughter then stops as Batman and Joker disappear as the rain continues to fall.
From the text itself, the ending is ambiguous:[4] according to one view, Batman agrees with the Joker, breaking his neck out of panel, causing the laughter to stop abruptly.[5] according to another view, the similar yet different adversaries, who have been fighting for years, end all of their disputes by having a good laugh;[6][7] The ending was purposely left uncertain to allow the reader to decide what happened.