Watchmen is set in an alternate reality that closely mirrors the contemporary world of the 1980s. The primary difference is the presence of superheroes. The point of divergence occurs in the year 1938. Their existence in this version of America is shown to have dramatically affected and altered the outcomes of real-world events such as the Vietnam War and the presidency of Richard Nixon.[25] In keeping with the realism of the series, although the costumed crimefighters of Watchmen are commonly called "superheroes", the only character who possesses obvious superhuman powers is Doctor Manhattan.[26] The existence of Doctor Manhattan has given the U.S. a strategic advantage over the Soviet Union, which has increased tensions between the two nations. Eventually, superheroes grow unpopular among the police and the public, leading to the passage of legislation in 1977 to outlaw them. While many of the heroes retired, Doctor Manhattan and The Comedian operate as government-sanctioned agents, and Rorschach continues to operate outside the law.[27]


In October 1985, New York City police are investigating the murder of Edward Blake. With the police having no leads, costumed vigilante Rorschach decides to probe further. Discovering Blake to be the face behind The Comedian, a costumed hero employed by the United States government, Rorschach believes he has discovered a plot to terminate costumed adventurers and sets about warning four of his retired comrades: Dan Dreiberg (formerly the second Nite Owl), the superpowered and emotionally detached Doctor Manhattan and his lover Laurie Juspeczyk (the second Silk Spectre), and Adrian Veidt (once the hero Ozymandias, and now a successful businessman).

After Blake's funeral, Manhattan is accused on national television of being the cause of cancer in friends and former colleagues. When the U.S. government takes the accusations seriously, Manhattan exiles himself to Mars. As Manhattan is one of the United States' greatest military powers, his departure throws humanity into political turmoil, with the Soviet Union invading Afghanistan to capitalize on the perceived American weakness. Rorschach's concerns appear vindicated when Adrian Veidt narrowly survives an assassination attempt, and Rorschach himself is framed for murdering Moloch, a former supervillain.

Neglected in her relationship with the once-human Manhattan, whose now-godlike powers and transformation have removed him completely from the everyday concerns of living beings and no longer kept on retainer by the government, Juspeczyk stays with Dreiberg; they begin a romance, don their costumes, and resume vigilante work as they grow closer together. With Dreiberg starting to believe some aspects of Rorschach's conspiracy theory, the pair take it upon themselves to break him out of prison. Manhattan, after looking back on his own personal history, places the fate of his involvement with human affairs in Juspeczyk's hands. He teleports her to Mars to make the case for emotional investment. During the course of the argument, Juspeczyk is forced to come to terms with the fact that Blake, who once attempted to rape her mother, was in fact her biological father following a second, consensual relationship. This discovery, reflecting the complexity of human emotions and relationships, re-sparks Manhattan's interest in humanity.

On Earth, Nite Owl and Rorschach continue to uncover the conspiracy surrounding the death of The Comedian and the accusations that drove Manhattan into exile. They discover evidence that Veidt may be behind the plan. Rorschach writes his suspicions about Veidt in his journal, in which he has been recording his entire investigation, and mails it to New Frontiersman, a local right-wing newspaper. The pair then leave New York and confront Veidt at his Antarctic retreat. Veidt explains his underlying plan is to save humanity from impending nuclear war between the United States and Soviet Union by faking an alien invasion in New York City, which will annihilate half the city's population. He hopes this will unite the nations against a perceived common enemy. He also reveals that he had murdered The Comedian, arranged for Dr. Manhattan's past associates to contract cancer, staged the attempt on his own life in order to place himself above suspicion, and killed Moloch in order to frame Rorschach. This was all done in an attempt to prevent his plan from being exposed. Nite Owl and Rorschach find Veidt's logic callous and abhorrent, but Veidt has already enacted his plan.

When Manhattan and Juspeczyk arrive back on Earth, they are confronted by mass destruction and wide scale death in New York City, with a gigantic Cthulhu-like creature, created by Veidt's laboratories, dead in the middle of the city. Manhattan notices his abilities are limited by tachyons emanating from the Antarctic, and the pair teleport there. They discover Veidt's involvement and confront him. Veidt shows everyone news broadcasts confirming the cessation of global hostilities and cooperation against a new threat; this leads almost all present to agree that concealing Veidt's truth from the public is in the best interests of the world to keep it united. Rorschach refuses to compromise and leaves, intent on revealing the truth. As he is making his way back, he is confronted by Manhattan. Rorschach tells Manhattan that he will have to kill him to stop him from exposing Veidt and his actions, and Manhattan responds by vaporizing him. Manhattan then wanders through the base and finds Veidt, who asks him if he did the right thing in the end. In response, Manhattan states that "Nothing ever ends" before leaving the Earth to create life elsewhere. Dreiberg and Juspeczyk go into hiding under new identities and continue their romance. Back in New York, the editor at New Frontiersman complains about having to pull a two-page column about Russia due to the new political climate. He asks his assistant to find some filler material from the "crank file," a collection of rejected submissions to the paper, many of which have not been reviewed yet. The series ends with the young man reaching towards the pile of discarded submissions, near the top of which is Rorschach's journal.

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