The episode opens at Gotham University, where a truck pulls in. In a dorm, Dick Grayson and his roommate Brian Rogers are watching a newscast on yesterday's University football game, which praises Brian's performance and his chances of winning a pro contract. Brian hopes that with a professional status, he can help his family financially, but he is nervous about the upcoming match against State Tech due to its importance. Dick and Brian are puzzled when a report reveals that several great athletes have suddenly had panic attacks, causing them to lose their games. Just then, a deliveryman appears at the door with a telegram. Brian and Dick read the telegram, confused: it wishes Brian luck, but then says, "only a fool knows no fear."
At the match, State Tech is beating Gotham University 24 to 3 and Brian is at his worst. During a huddle, he sweats in fear when told to take the offense. When the ball is snapped and the opposing players charge, Brian sees them as monsters, then drops the ball and curls up in terror. The game stops and Dick jumps from the stands and rushes to his friend as a medical team takes Brian to the infirmary.
Later, on night patrol in the Batmobile, Robin recounts this to Batman, who chalks it up to pressure. They spot two robbers smuggling jewelry atop a building and reel up, but halfway up, Robin begins panicking, sweating, and losing his grip on his grapple; soon he clings to the wall of the building. Batman notices and as he turns, the crooks above throw bricks and blocks at him, eventually hitting him. He manages to hold onto the wall near Robin and asks for his help, but Robin is frozen in fear. Batman falls, but manages to re-ascend with a spare grapple and help Robin down.
Finding it too suspicious that both Robin and his roommate would have panic attacks on the same day, Batman and Robin investigate Dick's dorm. Batman finds the telegram and notices it staining his gloves with a strange white powder. In the Batcave, after testing the powder on a cat, Batman deduces that the chemical induces fear, after being triggered by adrenaline or excitement. Logically there is only one person who could have made the chemical—the Scarecrow. They head to Arkham Asylum, where a corrupt guard insists Crane is in his cell. Batman pushes past him and finds a decoy in the cell, much to the Joker's amusement.
At a bookie's establishment, a disguised Scarecrow collects his latest winning of $28,000. The owner, Leon the Bookie, wonders how this man always wins, and Scarecrow says he makes his own luck. Leon sends a thug to follow him and "be persuasive." The Scarecrow leads the thug to his hideout and tricks him with another telegram, leaving him terrified.
The next day, Commissioner Gordon calls Batman to the police infirmary, where the thug hides under his bed in fear. Batman explains that Scarecrow is "fixing" games by gassing the best players with fear toxins so he can win at gambling and fund his experiments. Back at the cave, Robin tries to overcome his fear by crossing a narrow cliff, but Batman returns just in time to keep him from falling. Robin says he is no good to Batman, but Batman says he needs his help at tonight's football game.
Robin spots the Scarecrow outside the stadium and follows him until reaching the lockers. He manages to hold it together without Scarecrow spotting him. Robin checks the locker room, where he finds and gets rid of a helmet full of Scarecrow's powder. Later, in the field, the Gotham Knights are close to winning, much to the Scarecrow's confusion. When Batman confronts him on the stadium roof, Scarecrow threatens to drop a vial of fear chemicals on the crowd if Batman comes any closer. To keep Batman busy, he drops it on a scaffold, and Batman goes after it. As they fight, the vial falls. Facing his fears, Robin uses his Grappling-Hook Pistol to swing toward the tube and grab it. Scarecrow tries to flee, but Batman stops him.
At Wayne Manor, Bruce and Dick watch TV in the living room, as Brian Rogers signs a contract with the Gotham Knights. Dick smiles at Bruce's suggestion to congratulate Brian through a telegram.
Tropes in this episode include:
- Ad-Break Double-Take: After Robin's Big "NO!", it cuts for a commercial break. When it comes back he gives a Big "NO!" again.
- Big "NO!":
- Robin gives one when Batman falls from the building.
- The corrupt guard who insists that the Scarecrow is still in his cell.
- Cameo: As Batman walks through the Arkham cells, he passes by the Joker, Poison Ivy, and Two-Face, each accompanied by their respective Leitmotif. Only the Joker has a speaking line.
- Cut Lex Luthor a Check: The Scarecrow starts rigging sports and then betting on the games; he himself points out that chemicals are expensive and his usual crimes of causing wanton terror are not very lucrative.
- Desperate Object Catch: Robin intercepts the Scarecrow's vial of fear chemicals, overcoming his own chemically-induced fear of heights.
- Disproportionate Retribution: In one hilarious scene, Batman intercepts a telegram, believing that it is a fear toxinlaced letter sent by Scarecrow to make the recipient unable to play at his best. It's just an ordinary telegram, and the delivery boy comes to the conclusion that Batman was lying in wait for him because he double-parked.
- Evil vs. Evil: The Scarecrow versus Leon the Bookie. The Scarecrow rigs sports for profit and Leon sends a thug to "be persuasive" to find out how Scarecrow wins.
- Face Your Fears: Robin, having gotten a dose of the fear toxin from a drugged telegram, spends the episode petrified of heights. At the end, he has to confront it to save a stadium of Gothamites from being dosed with the same toxin.
- Mugging the Monster: A mook is sent to find out how "Mr. Lucky" always wins and is told to "be persuasive." He doesn't realize until too late that "Mr. Lucky" is the Scarecrow.
- Negative Continuity: Batman's comment that gambling is illegal in Gotham seems to contradict the events of "Joker's Wild". (However, it's possible that the law is changed between the two episodes or that the casino in "Joker's Wild" is located in a different jurisdiction.)
- Offscreen Villain Dark Matter: Subverted. This episode is one of the few times we actually see where a supervillain might get money to fund their more outrageous schemes.
- Oh, Crap!: When a bookie's henchman is sent to find out why "Mr. Lucky" never loses, no matter how many bets he places. The henchman follows Lucky to an abandoned horse stall, threatens him, and goes to pull him out of the shadows... only to find out he has just collared the Scarecrow. Things go downhill from there.