In 1981, party clown and aspiring stand-up comedian Arthur Fleck lives with his mother, Penny, in Gotham City. Gotham is rife with crime and unemployment. Arthur suffers from a disorder that causes him to laugh at inappropriate times. After delinquents attack Arthur, his co-worker Randall gives him a gun for protection. Arthur pursues a relationship with his neighbor, single mother Sophie Dumond, and invites her to his stand-up routine at a nightclub.
While entertaining at a children's hospital, Arthur's gun falls out of his pocket and he is fired. On the subway, still in clown makeup, Arthur is beaten by three drunken Wayne Enterprises businessmen; he shoots two in self-defense and wounds the third before pursuing him off the train and executing him. The killings are condemned by billionaire mayoral candidate Thomas Wayne, who calls those envious of more successful people "clowns". Demonstrations against Gotham's rich begin, with protesters donning clown masks in Arthur's image. Funding cuts shut down the social service program, leaving Arthur without his medication.
Sophie attends Arthur's stand-up routine, which goes poorly; he laughs uncontrollably and has difficulty delivering his jokes. Arthur's idol, popular talk show host, Murray Franklin, mocks Arthur by showing clips from the comedy routine on his show. Arthur intercepts a letter written by Penny to Thomas, alleging that he is Thomas's illegitimate son, and berates his mother for hiding the truth. Arthur goes to Wayne Manor, where he meets Thomas's young son Bruce, but flees after a scuffle with the family butler Alfred Pennyworth. Following a visit from two police detectives investigating the train murders, Penny suffers a stroke and is hospitalized.
Arthur sneaks into a private movie theater event and confronts Thomas, who tells him that Penny is delusional and not his biological mother. In denial, Arthur visits Arkham State Hospital and steals Penny's file; the file states she adopted Arthur and allowed her boyfriend to harm them both. However, Penny claims that Thomas used his influence to fabricate the adoption and hide their affair. Distraught, Arthur returns home and enters Sophie's apartment unannounced. Frightened, Sophie tells him he is in the wrong apartment and asks him to leave; their relationship was a figment of Arthur's imagination. The following day, Arthur kills Penny at the hospital.