Varrigan City is a city of Jefferson Island. Three days prior to the events of MadWorld, Varrigan City had become a target for a group of terrorists known as "The Organizers", who severed the island city's transportation and communication ties with the rest of the world, and then released a virus onto its population that would kill them in less than 24 hours. However, the Organizers informed the city's population that any person who killed another would receive the vaccine. The city was quickly transformed into the stage of a reoccurring game show called DeathWatch, with announcers Howard "Buckshot" Holmes and former DeathWatch fighter Kreese Kreeley. The remaining citizens of Varrigan City as well as new hopefuls became the show's contestants, hoping to become the top-ranked fighter in the game and win a large cash prize.
Enemies in Varrigan city consist of thugs armed with crude weaponry (bats, pipes, fist) although helmet enemies carrie chainsaws and axes.