The storyline of Battlefield: Bad Company revolves around a particular four man squad of military misfits during a fictional war in the near-future that pits the Russian Federation against the United States. The squad is part of the "B" Company of the 222nd Army battalion, more commonly known as "Bad Company". The company is composed of the insubordinate troublemakers whose use in the battlefield is limited to the role of cannon fodder. Because of this, "Bad Company" is often sent before Special Forces because they are "expendable".

The squad consists of Private Preston Marlowe, the game's protagonist (who was put in B-Company for taking a joy-ride in one of his installation's helicopters, damaging the helicopter and a general's limousine). Private Terrence Sweetwater (put in B-Company for uploading a virus on the military secure network), a soldier who is generally intelligent, and has a dry sense of humor and serves as the foil for Private George Gordon Haggard Jr., a.k.a "Haggard". Haggard often provides comic relief, when he is not raving about "blowing things up," which landed him in B-Company for blowing up a weapons cache (all that is mentioned is an officers latrine and claymores.) Sergeant Samuel D. Redford is in charge of this squad in Bad Company, and unlike many other Bad Company soldiers, he volunteered for his position, despite the company's high mortality rate. In exchange, the army would shorten his term of service. Through the start of the game, Redford shows his love for fishing, and only has a few more days left until the end of his service.

After the player character, Preston, arrives, he meets and goes off in his first mission with his new squad. After completing their mission which was to secure a strip of land after surviving an ambush, and being attacked with artillery, Sweetwater stumbles upon the body of a mercenary from the group called the "Legionnaires". They operate under The Legionnaire, a ruthless mercenary commander who pays his men in gold bars. Their slogan is the Latin phrase "Acta Non Verba", or "Action, Not Words". Sweetwater tells the squad that the Legionnaires are possibly the deadliest army in the world which bores everyone but suddenly mentions how each is reportedly paid in solid gold bars. Haggard excitedly searches the dead body his excuse as searching "for a pulse" and rises as he fishes out a small gold bar from the dead mercenary's pockets. Curiosity draws them from their second mission when they spot more Legionnaires loading a supply truck discovered to be filled with gold. The truck ends up driving past the border into the fictional Eastern Europe country called Serdaristan. Serdaristan is neutral in the conflict between America and Russia, the squad is unable to pursue the trucks any further. Haggard, however, loses control of himself with the promise of gold and begins to excitedly run away from his shocked squad after the trucks while yelling "There's gold in them thar hills!" and firing his shotgun into the air. He single-handedly invades a neutral country.

Redford orders the squad to pursue Haggard in order to prevent him from causing any more damage. When they get a hold of Haggard, Mike-One-Juliet (the squad's mission coordinator, also known as Miss July) calls Redford on the radio and reprimands him for their actions. She specifically says that Redford, who was one day away from retirement, would be subject to a court martial for Haggard's offense and their subsequent invasion into neutral soil would cause Redford's military term to be significantly raised. Hesitantly, Redford decides that there is little else for their squad to do other than run, and since Haggard could point them in the direction of the mercenaries' gold, they decide to continue. They reach a harbor and find a ship that is loaded with the trucks' gold. Unfortunately, they are caught by the U.S. Army and forced to surrender before reaching the ship. However, a deal was soon struck. The squad would have their charges dropped if they investigate Serdaristan. Since the squad was officially AWOL, the U.S. Army would not be directly responsible if they were captured. The squad was then given orders to capture the corrupt dictator of Serdaristan, Zavomir Serdar, by advancing to his palace through the President's golf course. Serdaristan was soon officially considered "not neutral" after they shot down an American UH-60 Black Hawk helicopter. They approach the dictator's palace after fighting heavy resistance with legionnaires, to find the dictator locked in his room playing golf who tells them that the Legionnaires had taken over the country in order to pay for their bill. As they attempt to escape, Mike-One-Juliet informs them that they cannot be evacuated and must find a way out on their own. The squad escapes with Serdar on his golden "pimped out" Mil Mi-24 helicopter.

After a long flight through Serdaristan the squad is shot down by a Ka-52 and crashes in behind enemy lines. Preston wakes up alone and dazed, and quickly contacts Mike-One-Juliet for help in finding the rest of his squad. Following Mike-One-Juliet's directions, Preston searches for his squad. He sneaks up to the top of a mountain monastery where his squad mates are being held. (where he finds out that the squad managed to escape just as he enters already blowing up the place), and saves Sedar from execution by the Legionnaires. They escape in a boat and leave Sedar on a small, desert island when he demands to be self-exiled after he tells them where to go. The squad arrives in an unfinished city called Sadiz somewhere on the Caspian Sea while on a beach, they spot the ship they saw earlier in Sedaristan. The squad fights through stiff Arab resistance and learn that the U.S. Army is also mounting an offensive in the region and fear they will be able to steal the gold before them.

They slowed down the U.S. Army, by blowing up bridges and other distraction, they reach a garage filled with vast amount of gold but are attacked by the Legionnaire in his personal Ka-52. Preston shoots down The Legionnaire with a Carl Gustav recoilless rifle and the squad returns to the gold, only to find the U.S. Army loading the gold into trucks. They are about to give up and leave but are spotted by an American officer, before they are discovered as rogue soldiers Preston manages to convince the officer that the area is "secured" and the officer orders them to take one of the trucks "filled with scrap metal" and join the convoy. The squad happily obliges and takes the truck.

The game soon cross fades and shows the wreckage of the Ka-52. The Legionnaire leader rises from the burning wreckage with a vengeful expression, seemingly unhurt.