Your character gains access to create a Nemesis at level 25. Go to the Millenium City Police Department (MCPD) station behind City Hall. After creating your nemesis, his (or her) minions will start appearing sometimes when you fight other enemies. These minions will often drop items that start nemesis missions. Eventually you will capture your nemesis and send him to jail, allowing you to to create another nemesis.
Posted from Champions Online official site Dev Blog
Anyone who's ever read a comic book, or seen a movie or TV show based on a comic book, is already familiar with the idea of a Nemesis. Batman has the Joker, Superman has Lex Luthor, Spiderman has the Venom. It makes sense. Any good superhero is bound to upset powerful supervillains, and the conflict between a hero and his Nemesis is part of what makes the story so exciting. It was something those of us here at Cryptic had been thinking about, and certainly something our players were interested in. We used to get tons of requests from players for some sort of Nemesis, but we didn't have a framework for it in our last project. Champions in particular really lent itself to the whole idea of having a Nemesis, since there was already a framework for that built into the pen and paper version: having an enemy, or nemesis, you can select having an enemy as part of your character background.
Having a Nemesis is iconic in superhero comics, and we are very excited to bring it to players in Champions Online. Battling and defeating your Nemesis brings a special superhero feel to Champions Online. Also, other games haven’t really given players a chance to customize their own adversaries. We also like that it brings the fight to you. Instead of making the player always go out to find missions, we wanted the Nemesis to reach out and grab you, bringing you into a story. All of that sounds great, but the big challenge is how to implement it.
Making the Nemesis a "character" meant that we could give it all the tools we give our regular players -- each Nemesis gets its own costume, its own name, its own powers, its own minions, and its own back story. That also meant we had to do a significant amount of work to store and manage other full characters attached to your main character.
We also wanted to make sure that the Nemesis system fit in well with the rest of the world. We needed to integrate it with the mission system so it felt natural, not like a separate game that you played for a while before getting back to the main plotline. It had to become a part of that plotline, so we had to find ways to mesh the two. That’s a pretty big challenge when you consider how much of the Nemesis system involves user created content. You get to completely create your Nemesis. You choose its costume, its entire appearance. You also choose its power sets and minions. Beyond that, you can choose its personality type. That presents a huge challenge for the game designers (designing Nemesis missions that both fit with the overarching plot of Champions Online and work well with a huge variety of Nemeses).