Penguin was smuggling illicit firearms into Gotham City from Blüdhaven via his front company North Refrigeration. Nightwing, the crime-fighter in Blüdhaven, ended up going to Gotham to put an end to Penguin's gun laundering as a result. Penguin stationed weapons caches at Harold's Repair on Miagani Island, Sionis Industries and the water filtration plant at Chinatown Sewers on Bleake Island, and The Grinning Fishmonger and the AmerTek Building on Founders' Island.
Batman eventually became involved upon learning that the Arkham Knight, who had abducted Oracle, had headed over to North Refrigeration with Scarecrow after brutally interrogating a militia driver by nearly crushing his head under the wheel of the Batmobile. Nightwing then rendezvoused with him on a rooftop overlooking the Ranelagh Ferry Tunnel, and although he was told to leave by his former mentor (largely because the Caped Crusader was reluctant to lose another ally thanks largely to Oracle's abduction), he nonetheless supplied Batman with a prototype Disruptor that he had received from Lucius Fox.After taking down both Two-Face and Penguin thugs, he then proceeded to use the Disruptor to tag the truck with a tracker, and also proceeded to knock on the door to trick the drivers into driving away and luring them straight to the hideout, also deliberately holding back in his pursuit of the truck to coax them into thinking they've outrun him, anticipating that they would not willingly go back to the hideout if they felt that Batman was still pursuing them.
Upon arriving at Harold's Repair, Batman proceeded to take down the heavy guard posted on the rooftop, and then proceeded to infiltrate the area, with Penguin being notified about Batman and how his thugs allegedly eluded the Dark Knight. Penguin then proceeded to give a speech regarding how circumstances forced him and his criminal empire to enter a truce with Scarecrow and the other kingpins of Gotham, acknowledging that they're at least "bloody rich" from the proceeds of their weapons' racket. He also implied that once Batman was killed, they'll kill the other criminal kingpins, especially Two-Face.
However, Batman then emerged from the vents and proceeded to simultaneously hold off Penguin's henchmen and interrogate Penguin, eventually learning that Arkham Knight and Oracle were already en-route to meet with Simon Stagg at Stagg Enterprises near the west river. Penguin ultimately managed to escape while Batman was pinned down by his henchmen, although not before taunting the Caped Crusader about how he's going to fail. Batman was then about to be executed by being hit in the head with a baseball bat, only for Nightwing to save Batman at the last minute, also letting in a jab about Batman "handling things" with the goons. After Batman and Nightwing took out the thugs, Batman decided to destroy the cache to prevent them from getting on the street.As Batman is about to get into the safe containing the weapons, Nightwing requests that he help Batman, with Batman telling him he had it under control and that he needed him back in Blüdhaven. Nightwing then pointed out the entire gunrunning business is affecting Blüdhaven as much as it is Gotham City, and thus Nightwing needs to be in Gotham City to prevent the gunrunning business and stop Scarecrow for Blüdhaven's sake, and also pointed out that the amount of weapons Penguin smuggled into Gotham meant this was just one weapons cache out of many. Batman then agreed to let Nightwing try and track down the remaining weapons caches, starting with searching the area for evidence implicating the location of the North Refrigeration trucks.
Batman then entered the safe, rigged the containers with Explosive Gel, and after making sure the safe was securely sealed to ensure the impending explosion didn't severely destroy the foundation of the building, detonated the cache. Nightwing then vowed to contact Batman if he found any of Penguin's trucks. Eventually, Nightwing managed to locate and track another of Penguin's trucks around the time Batman was trying to locate an ancient root system to aid Poison Ivy in holding back the impending Fear toxin. He eventually managed to trace the truck near Mercy Bridge. Batman then proceeded to do the same trick as before.
While trying to flee, Penguin then was contacted by them, who then told them to lose Batman, and threaten to inflict bodily harm if he comes anywhere near his weapons cache, also reminding them that just because they can't see Batman doesn't mean he can't see them. Batman eventually tracked the location down to Sionis Industries and notified Nightwing of the cache's location before deciding to go in first, proceeding to take out the group with Nightwing before detonating the cache. Later, Nightwing notified him of a truck near the Panessa Studios. Batman then did the same trick as before. Penguin then got a call from his henchmen, and upon learning that Batman is tailing them, gets irritated at them being "useless".Penguin then, after sarcastically accepting their apology, proceeded to threaten to castrate them if Batman finds the third cache at the Grinning Fishmonger fish market, pointing out that Batman already destroyed two of his caches beforehand. Batman eventually tracked the location to the Grinning Fishmonger and notified Nightwing of the location before proceeding to take out the group inside with Nightwing and detonate it. Nightwing then notified Batman of another truck being spotted near the canal at Bleake Island. Batman then did the same trick as before, and eventually tracked them to the water filtration plant and notified Nightwing about the discovery. Batman then contacted Alfred and requested a way inside the plant, with Alfred informing Batman that the way inside was in the sewers of the island, also suggesting he use the Batmobile to access the sewers. Batman eventually managed to enter via the tunnel and managed to infiltrate and defeat the presence inside.
Nightwing, however, did not aid Batman, as he had recklessly pursued another truck to quicken things and went over to take down the weapons cache at the AmerTek Building, resulting in his capture by Penguin's forces. Just after Batman destroyed the water filtration plant's weapons cache, he was contacted by video screen by Penguin, with the captured Nightwing telling Batman that he found Penguin and he's right where they want them, with Penguin proceeding to hit Nightwing and call him a "cocky little bastard" in response. Penguin then threatens the Dark Knight that he decided to "do some taking of his own" in response to Batman's destruction of his various weapons caches. Nightwing then told him not to worry about him and just find the cache. Batman then contacted Alfred and requested he activate Nightwing's tracker and isolate his location. Alfred then asked if Nightwing was in any danger, with Batman confirming that Penguin's captured him, with Alfred realizing the gravity of the situation, and informing him that he's being held in a location at Otisburg, and told him to hurry due to Nightwing having a reckless nature to him.Batman eventually narrowed down the location to the AmerTek Building and proceeded to infiltrate the area. Meanwhile, Nightwing was placed under heavy guard by Penguin's thugs, with the thugs being forbidden to kill or otherwise maim Nightwing before Penguin's arrival, as the latter wanted to deal with Nightwing personally. Ultimately, Batman freed him and together took down the thugs, Batman then proceeded to give a brief scolding to Nightwing for trying to take down the weapons cache alone, with Nightwing pointing out that they managed to find all the weapons caches with Penguin's gunrunning business being finished. Batman then reminded him that they still needed to find Penguin himself with Nightwing expressing doubts that Penguin stuck around. Batman then proceeded to rig the final cache to blow and was about to seal it. Unfortunately, Penguin came out of hiding and managed to ambush Nightwing again, eventually restraining him and placing a gun to his temple. He then sadistically taunted Batman about how he needed to keep a closer eye on Nightwing for his being careless, before proceeding to threaten to show Batman "the contents of [Nightwing's] head" if Batman even attempts to walk towards Penguin.
Nightwing then proceeded to allude to the Flying Graysons Acrobat group from the circus to Penguin as the latter's threatening both Nightwing and Batman. Nightwing then proceeded to elbow Penguin in the gut, stunning him long enough to be freed from his grip and then throw Penguin at Batman, who then grabs him and slams him to the ground before pinning him. Batman is then poised to blow up the cache, with Penguin threatening him to stop to no avail. Upon seeing the last cache detonated, Penguin angrily yelled that he hopes Batman doesn't keep to his one rule of not killing, as otherwise, Penguin will kill him, but was knocked out mid sentence just as Nightwing was about to suggest doing so. Batman then told Nightwing that he's proud of him, and proceeded to tell him to return to Blüdhaven as after this night they won't see each other again. Nightwing ultimately accepted after realizing Batman was serious.Batman then proceeded to put the knocked out Penguin in his Batmobile and proceeded to drive Penguin to the GCPD lockup. Penguin then woke up and wondered where he was, before Batman told him to guess. Penguin then angrily protested that those guns were his, with Batman suggesting to Penguin that he could sell the ruined caches for scrap, if Penguin ever manages to leave jail after that night. Upon being delivered to the GCPD compound, Penguin's imprisoned thugs proceeded to hail Penguin's return.
However, Penguin's attempt at gunrunning as well as Batman and Nightwing's tracking down and destroying the weapons caches ultimately acted as a diversion while Two-Face's Gang robbed various banks in Bludhaven.
- The mission name refers to another name for arms trafficking, which is a criminal charge of smuggling and distributing weapons to various parties, most of which are considered illegal.
- Depending on when the mission is completed, Penguin and Batman's exchange while en route to the GCPD will vary, although the Batman and Penguin's first lines remained the same:
- If the player completed the mission before Batman encountered Scarecrow, Penguin will remind Batman about how he nearly had Nightwing killed, before mockingly expressing concern about whether he had touched a nerve regarding the reminder. Batman, clearly angry with Penguin, subtly threatened Penguin by telling him that his destination choices are either the GCPD, or the local morgue. Penguin then attempted to point out that Batman refuses to kill people, with Batman admitting that he's hasn't been himself lately. Penguin, clearly intimidated by Batman's recent actions, suggested he take a rest and that everyone needs it every once in a while.
- If the player completed the mission after Batman encountered Scarecrow, Penguin will allude to Scarecrow's public unmasking of Batman and mention that he now knows Batman's secret identity, making clear that he holds Batman responsible for both foiling his operations and for his family ruining Penguin's. Batman then reminds Penguin that the latter's family was corrupt, while Penguin angrily shot back that the Waynes were dead, before mockingly asking if he touched a nerve in faux-concern. Batman then hints that he'll fashion a new identity later on. Penguin then agrees and mockingly suggests he go for a flying squirrel, before Batman ominously warns him that he'll see what he has in store.
- Even if the side mission is completed before Scarecrow unmasks Batman, he still says that Nightwing won't see him again, hinting that even Batman felt he wasn't going to survive the night, as he either would die or would be forced to go into hiding. A similar discussion is shared between Catwoman and Batman after defeating the Riddler.
- The Gunrunner mission was given an indirect mention nearing the beginning of the Gotham Story DLC A Flip of a Coin, where one of Two-Face's thugs explained that "while the Bat and pretty boy were screwing around in Gotham, we were hitting Bludhaven's banks." when explaining how they managed to get a lot of money despite Batman foiling their attempt at robbing banks in Gotham and the cash being seized by the GCPD.