In 1890, private detective Sherlock Holmes (Robert Downey Jr.) and his partner Dr. John Watson (Jude Law) prevent the ritual murder of a woman by Lord Henry Blackwood (Mark Strong), who has killed five other young women similarly. Inspector Lestrade (Eddie Marsan) and the police arrest Blackwood. Three months later, Watson is engaged to Mary Morstan (Kelly Reilly) and moving out of 221B Baker Street; while he enjoys their adventures together, Watson looks forward to not having to deal with Holmes’ eccentricities. Meanwhile, Blackwood has been sentenced to death and requests to see Holmes, whom he warns of three more unstoppable deaths that will cause great changes to the world. Blackwood is subsequently hanged.
Holmes is visited by Irene Adler (Rachel McAdams), a former adversary who asks him to find a missing man named Luke Reordan. After her departure, Holmes follows her as she meets with her secret employer, and only learns that the man is a professor and that he intimidates Adler. Meanwhile, sightings of a living Blackwood and the discovery of his destroyed tomb lead to belief that Blackwood has risen from the grave; Reordan is found dead inside Blackwood’s coffin. Following a series of clues from the body, Holmes and Watson find Reordan’s home and discover experiments attempting to merge science with magic. After they survive a battle with Blackwood’s men that attempt to destroy the lab, Holmes is taken to the Temple of the Four Orders, a secret magical fraternity with considerable political influence. The leaders – Lord Chief Justice Sir Thomas Rotheram (James Fox), U.S. Ambassador Standish (William Hope), and Home Secretary Lord Coward (Hans Matheson) – ask Holmes to stop Blackwood, a former member of the society and Sir Thomas’s son.
That night Sir Thomas drowns in his bath as Blackwood watches, and the next night Lord Coward calls a meeting of the Order. He nominates Blackwood to take command in place of Sir Thomas and Blackwood reveals himself to the group. Standish attempts to shoot Blackwood but is set on fire when he pulls the trigger of his gun, and runs out a window to his death. Lord Coward issues an arrest warrant for Holmes, causing him to go into hiding. Holmes studies the rituals of the Order and recognizes their symbols in Blackwood’s murders that were staged at specific locations; from this he deduces the targets of the final murder are the members of Parliament. With the aid of Lestrade, Holmes fakes arrest and is taken to see Coward, where he uses evidence on Coward’s clothes to deduce Blackwood has conducted a ceremony in the sewers beneath the Palace of Westminster.