Arkham Asylum had been closed for fifteen years. Mayor Aubrey James mentioned that the Wayne Family was in the process of redeveloping the site, tearing down the century-old asylum building and building a modern, state-of-the-art mental health facility in its place. They believed if they could help the city's least fortunate, the new asylum would bring hope to Gotham. Mayor James later stated that Salvatore Maroni will be refurbishing the building.
Later, the plan was more or less scrapped and replaced with a plan to modernize the old building. It was later reopened to house the criminally insane.
Mayor James later reassigned James Gordon to guard duty at Arkham Asylum working under its director Gerry Lang. Its inmate Jack Buchinsky and Aaron Danzig later escaped from Arkham after killing Director Lang.
Theo Galavan had Zaardon placed in Arkham Asylum so that the vapor in his system would render everyone in the room unconscious. This act allowed Tabitha Galavan to spring Barbara Kean, Jerome Valeska, Aaron Helzinger, Robert Greenwood, Arnold Dobkins, and Richard Sionis from Arkham in order to serve Theo.
Oswald Cobblepot was later incarcerated at Arkham Asylum following his arrest. He had his first therapy session with Hugo Strange. It is also revealed that Indian Hill runs underneath Arkham Asylum in the basement.
Ethel Peabody later had Oswald strapped to a special chair as part of his "treatment." She later oversaw an activity in which he had to participate in a game of "Duck Duck Goose." Victor Fries raided Arkham Asylum to reclaim Nora Fries. While delaying the police from reaching his room, Hugo Strange had Victor led into a room where Strange, speaking via intercom, offered him a deal: He would allow him to take the car keys in the room in exchange for the cryogenic compound that was used on the victim who thawed out at the Gotham City Police Department. Victor agreed to the terms and left the A-16 in the chair as Ethel Peabody went to retrieve it. Hugo Strange received the A-16 cryogenic compound from Ethel Peabody.
After doing some mind therapy on Oswald Cobblepot using the image of Gertrud Kapelput, Hugo Strange and Ethel Peabody then do the "Ice Cream Therapy" where Oswald Cobblepot is the only inmate to receive ice cream in Arkham's cafeteria. When Aaron Helzinger (who at some point was somehow recaptured and re-incarcerated) attacks Oswald out of anger that nobody else was given ice cream, Oswald doesn't fight back. Seeing this, Hugo sends the guards in to break up the attack. Later on, Oswald is thrown into the same room with a chained up Aaron. Rather than kill Aaron, Oswald frees him. When meeting with Oswald, Hugo declares that Oswald is sane and has received the approval to release Oswald from Arkham Asylum. After Oswald leaves Arkham Asylum, Hugo Strange tells Ethel Peabody that he has a secret unknown plan with Oswald. Ethel doesn't want to know what it was, though she doesn't know that it would be much different from the monsters that he created "down below."
When the news of Jim Gordon being found guilty and being sentenced to Blackgate Penitentiary was reported on the radio, Barbara Kean awoke from her coma. A nurse noticed this and shouted for someone to inform Hugo Strange.
Hugo Strange started doing some group therapy with Barbara Kean and some other female inmates in the group therapy. Barbara is later released from Arkham so that Hugo Strange can study her. After Edward Nygma was exposed as the one who framed Gordon, he ends up being arrested by the Gotham City Police Department and is remanded to Arkham Asylum.
Jim Gordon later visited Hugo Strange at Arkham Asylum in order to get information about what happened to Pinewood Farms. Edward Nygma later broke up Aaron Helzinger's attack on Rudy by stating that the "Lucy" that talks to Rudy is a ghost. Upon overhearing Hugo Strange and Ethel Peabody, Edward Nygma offers to help Hugo as he tells him about the motives behind the conditions of Aaron Helzinger, Sharon, and Norton. Ethel Peabody later retrieves Aaron Helzinger as Edward Nygma starts to wonder what Hugo Strange is hiding. Edward then has Sharon and Norton gather some stuff to put together an object. Later that night, Edward uses his invention to find the hidden elevator leading to the Indian Hill facility.
Edward Nygma makes his attempted escape through the ventilations where he runs into Selina Kyle. Thanks to some directions from her in exchange for directions to the basement, Nygma makes his way to the roof only to be recaptured.
Chained up in the same cell as Stirk, Edward Nygma persuades Ethel Peabody to let him help defeat Jim Gordon. Bruce Wayne and Lucius Fox decide to pay a visit to Arkham Asylum. Hugo Strange meets with Bruce Wayne who states that he and Lucius wants to have a tour. Bruce states that he wants to talk with Hugo Strange. Strange agrees to meet with Bruce while Ethel gives Lucius a tour. James Gordon also infiltrates Arkham Asylum to do his part. When Strange asks his real meaning of his visit, Bruce claims that he had his suspicions of what happened to Thomas Wayne and Martha Wayne as Strange tells him to turn back and make the choice that his father couldn't make. Lucius Fox found the secret elevator and marked the part for Gordon to find. Upon confirming his suspicions of Strange, Bruce is then taken away by the orderlies alongside Lucius and Gordon. As he is being dragged way, Bruce demands to know what Strange did to Selina Kyle. In his office, Hugo Strange and Ethel Peabody are then contacted by the Court where he tells them that Fish Mooney was revived with her memory intact. While demanding for Hugo Strange to know what Bruce Wayne knows, the Court informs Strange to move everything to their facility upstate and to destroy Indian Hill. With help from Alfred Pennyworth, Harvey Bullock initiates a raid on Arkham Asylum. As Gordon is worked on by Hugo Strange that involves the forming a molding for Basil, Nygma keeps an eye on Bruce and Lucius while trying to figure out what they know about or else the chamber they are in will be filled with poison gas. The Strike Force begins to close in on Arkham Asylum.
Basil as Gordon confronts the Strike Force and persuades them to take him to the Gotham City Police Station. Edward Nygma continues his works with Bruce Wayne and Lucius Fox as he asks them questions. While Bruce guess the answer for Wayne Enterprises being behind the Indian Hill facility right, Nygma then asks Bruce and Lucius of who runs Wayne Enterprises. When Lucius claims the Board of Directors runs Wayne Enterprises, Nygma states that it's incorrect as he starts pumping in the poison gas. Afterwards, Nygma speaks with Strange about who actually runs Wayne Enterprises. Not wanting to tell him, Strange then has Nygma re-imprisoned in his cell as he is then told by the White-Haired Woman to kill James Gordon, Lucius Fox, and Bruce Wayne. After Barbara Kean exposed Basil Karlo's ruse, the police begin their raid on Arkham Asylum.
Valerie Vale visited James Gordon where she reads the article that Arkham Asylum is looking for a new director. Oswald Cobblepot later visited Edward Nygma and tells him about Fish Mooney being at large while he is surrounded by lunatics. After making a reference to Alexander the Great, Nygma reminds Cobblepot that penguins eat fish.
Oswald Cobblepot later visits the current warden of Arkham Asylum named Charles Quimby and gives him an option to have Edward Nygma released or have him demoted to a lowly position at Arkham Asylum. Warden Quimby later declares Nygma sane and is released from Arkham Asylum. Nygma is then picked up by Cobblepot.
Jervis Tetch is later visited at Arkham Asylum by Nathaniel Barnes to get some information on how to beat the virus in Alice's blood. Jervis states that he will tell Nathaniel what he'll know in exchange for what part of him is affected. When Nathaniel states that it was criminals, Jervis states that it sets off his rage. Jervis states that the only cure is to "give in and let Alice win." Then he states that anyone affected by the virus will hear the voices. Barnes leaves stating that he'll make it right.
After being subdued by Jim Gordon and arrested by the police, Nathaniel Barnes was incarcerated in Arkham Asylum. He was seen in a straitjacket repeatedly saying "guilty."
Jervis Tetch was later abducted from an Arkham Asylum transport by Tabitha Galavan and Butch Gilzean. After being rescued by Gordon, a sample of his blood was taken from Tetch and was left for the rest of the police. It was mentioned that Jervis' injuries were tended to before he was sent back to Arkham Asylum.
Oswald Cobblepot found himself back at the asylum after being accused of killing Carmine Falcone as well as a young boy named Martin. Whilst screaming in his cell, he is communicated to by an inmate in the cell next to him, who turns out to be Jerome Valeska.
At some point, Jonathan Crane was incarcerated at Arkham Asylum. Jerome later collaborated with him and Jervis Tetch where they release all the inmates from Arkham Asylum as a diversion to begin Jerome's plot. The Gotham City Police Department managed to round up 40 of it's inmates.
- Warden unnamed - Warden
- † Dr. Gerry Lang (director)
- Charles Quimby (director; temporary)
- Dr. Leslie Thompkins (medical practitioner; transferred to Gotham City Police Department)
- † Steven Wenger (guard)
- James Gordon (temporary guard)
- Hugo Strange (chief of psychiatry, director; incarcerated)
- † Dr. Ethel Peabody (psychiatrist)
- † Marge (medical practitioner)
- † Patrice Tortuga (guard)
- † Beatrice Oliver (guard)
- Robert Jones
- Aaron Danzig
- Ian Hargrove
- Jack Buchinsky (under the alias of "Jack Gruber")
- Aaron Helzinger (fate unknown)
- Nigel (fate unknown)
- Dumfree Tweed
- Deever Tweed
- † Jerome Valeska (first incarceration; deceased)
- Barbara Kean (first incarceration)
- † Richard Sionis
- Aaron Helzinger (first incarceration)
- † Robert Greenwood
- † Arnold Dobkins
- † Lazlo Valentin
- Oswald Cobblepot (second incarceration; Later cleared of charges)
- † Jerome Valeska (second incarceration)
- Jervis Tetch
- Jonathan Crane
- Ephram Snow
- Daedalus Boch
- Erasmus Rayne
- † Carl
- 80 more inmates during the great outbreak caused by Jerome, Tetch and Crane
- Arkham Asylum is a major landmark in the DC Comics universe, it is most notable for housing Batman's most infamous foes who are criminally insane.
- A similar but separate institute named Gotham Asylum is featured at the beginning of season 4.
- In an error of continuity the Gotham prequel book Gotham: Dawn of Darkness (which takes place two months prior to the first episode) mentions that Arkham is open and housing inmates, despite the fact it had been closed for over a decade in the show proper and wasn't reopened again until the episode "Harvey Dent".