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Located on the outskirts of Gotham City, on an island, Arkham Asylum holds the criminally insane enemies of Batman. Other foes are incarcerated at Blackgate Penitentiary. Although it has had numerous administrators, it's current head is Jeremiah Arkham.
The Asylum doesn't have a good record, with many escapes happening quite frequently. Released offenders are more often then not returned to their usual ways and cause mayhem and destruction in Gotham City. Several employees at the asylum have found themselves inmates, such as Dr. Jeremiah Arkham, Dr. Harleen Quinzel and Lyle Bolton.
The Asylum is said to be created by Amadeus Arkham who dedicated the asylum to his dead wife, Elizabeth Arkham. The first inmate of the Asylum was Mad-dog.
Prisoners with unusual medical conditions that prevent them from staying in a regular prison are housed there. For example, Mr. Freeze is not technically insane, but he requires a strongly refrigerated environment to stay alive. Arkham Asylum is seen as a regularity for certain offenders, due to special conditions required by Gotham or the inmates.
During the course of Batman: Arkham Asylum, the asylum is portrayed as not just one building, but an entire island, containing Botanical Gardens, a Penitentiary, the old Arkham Mansion, a lockdown style Intensive Treatment ward and an extensive sewer system. A second Batcave is also on the Island, set in the caves as a precautionary measure in case something ever happened.