The next morning, Peter finds that his previously impaired vision has improved and that his body has metamorphosized into a more muscular physique. During lunch at school, he finds his body producing webbing that shoot out of his wrist and that his quickened reflexes and super strength allow him to win a fight with bully Flash Thompson, Mary Jane's boyfriend. Peter discovers he has developed superhuman speed, strength, the ability to stick to surfaces, and a heightened ability to sense danger. Brushing off Uncle Ben's advice that "With great power comes great responsibility," Peter enters a wrestling tournament to get money to buy a car and impress Mary Jane. He wins his match, but the promoter cheats him out of the contest money and when a thief raids the tournament, Peter indifferently observes. He later discovers his Uncle Ben has been carjacked and killed. Peter confronts the thief only to realize it was the same thief he let get away.
After Peter disarms him, the fleeing carjacker falls out a window and dies. Meanwhile, Norman Osborn kills several scientists and the military's General Slocum, who is openly biased towards Oscorp in favor of rival company Quest Aerospace. Upon graduating school, Peter begins using his abilities to fight injustice, donning a costume and the persona of Spider-Man. Newspaper editor J. Jonah Jameson hires him as a freelance photographer, since Peter is the only person providing clear images of Spider-Man, but does not hide his distrust of the hero in the newspaper printings. Norman, upon learning Oscorp's board members plan to sell the company to Quest Aerospace, assassinates them at the World Unity Fair before being driven away by Spider-Man. Jameson quickly dubs the mysterious killer the Green Goblin. The Goblin offers Spider-Man a place at his side, but Spider-Man refuses. At the Osborn and Parkers' Thanksgiving dinner, Norman, unknown to Peter, deduces Spider-Man's true identity when he saw an injury caused by the Goblin on Peter; the Green Goblin later injures Aunt May, leaving her hospitalized.
Mary Jane admits she has a crush on Spider-Man, who has rescued her on numerous occasions, and she asks Peter whether Spider-Man ever asked about her. Harry, who loves Mary Jane, arrives and discovers that she does not feel likewise toward him. Devastated, Harry tells his father that Peter loves Mary Jane, unintentionally revealing Spider-Man's biggest weakness. The Goblin holds Mary Jane and a Roosevelt Island Tram car full of children hostage alongside the Queensboro Bridge. He forces Spider-Man to choose who he wants to save, and drops Mary Jane and the children. Spider-Man saves both Mary Jane and the tram car, while the Goblin is pelted by civilians showing loyalty to Spider-Man. The Goblin then grabs Spider-Man and throws him into an abandoned building where they fight. When the Goblin boasts of how he will later kill Mary Jane, an enraged Spider-Man overpowers the Goblin, unmasking him.
Norman begs for forgiveness, but his Goblin persona attempts to remote-control his glider to kill Spider-Man. Warned by his spider-sense, the superhero avoids the attack by jumping out of the glider's path, causing the glider to fatally wound Norman instead. Before his death, Norman asks Peter not to tell Harry about the Green Goblin. Spider-Man takes Norman's body back to Norman's house and hides the Green Goblin's equipment. At Norman’s funeral, Harry swears revenge on Spider-Man, thinking that he is responsible for his father's death, and asserts that Peter is all he has left. Mary Jane confesses to Peter she is in love with him, but Peter, feeling that he must protect her from the unwanted attentions of Spider-Man's enemies, hides his true feelings and tells her that they can only be friends. As Peter leaves the funeral, he recalls Ben's words about responsibility, and accepts his new life as Spider-Man.
Years later, a teenaged Peter attends Midtown Science High School, where he is bullied by Flash Thompson and has caught the eye of the beautiful Gwen Stacy. At home, Peter finds his father's papers and learns he worked with fellow scientist Dr. Curt Connors at Oscorp. Sneaking into Oscorp, Peter enters a lab where a "biocable" is under development from genetically modified spiders, one of which bites him. On the subway ride home, he discovers that he has developed spider-like abilities.
After studying Richard's papers, Peter visits the one-armed Connors, reveals he is Richard Parker's son and gives Connors his father's "decay rate algorithm", the missing piece in Connors' experiments on regenerating limbs. Connors is being pressed by his superior, Dr. Ratha, to devise a cure for the dying (but unseen) head of Oscorp, Norman Osborn. In school, Peter gets into trouble after a basketball challenge with Flash in which Peter accidentally shatters the backboard glass. His uncle changes work shifts to meet with the principal and asks Peter to replace him walking home with Aunt May that night. Peter gets distracted and helps Connors regenerate the limb of a laboratory mouse. Peter's failure causes an argument with his uncle and he leaves. At a nearby deli, a cashier refuses to let Peter buy milk when Peter is two cents short; when a thief suddenly raids the store, Peter indifferently observes. While searching for Peter, Uncle Ben attempts to stop the thief and is killed. The thief escapes as Peter finds Ben on the sidewalk.
Afterward, Peter uses his new abilities to hunt criminals matching the killer's description. After a fall lands him inside an abandoned gym, a luchador-wrestling poster inspires him to create a mask to hide his identity. He adds a spandex suit and builds mechanical devices to attach to his wrists to shoot a biocable "web". Peter accepts a dinner invitation from Gwen, where he meets and has a tense conversation with her father, police captain George Stacy, over Spider-Man's motives. After dinner, Peter reveals his identity to Gwen and they kiss.
After seeing success with the mouse using lizard DNA, Ratha demands Connors begin human trials immediately if Osborn is to survive. Connors refuses to rush the drug-testing procedure and put innocent people at risk. Ratha fires Connors and decides to test Connors' serum at a Veterans Administration hospital under the guise of a flu shot. In an act of desperation, Connors tries the formula on himself. After passing out, he awakens to find his missing arm has regenerated. Discovering that Ratha is on his way to the VA hospital, Connors, whose skin is turning green and scaly, goes to intercept him. By the time he gets to the Williamsburg Bridge Connors has become a violent hybrid of lizard and man, tossing cars, including Ratha's, over the side of the bridge. Peter, now calling himself Spider-Man, snatches each falling car with his web-lines.
Spider-Man suspects Connors is Lizard and unsuccessfully confronts the creature in the sewers. Lizard learns Spider-Man's real identity via the name on an abandoned camera and follows Peter to school where they fight. In response, the police start a manhunt for both Spider-Man and Lizard. The police corner Spider-Man and Captain Stacy discovers that he is really Peter. Lizard plans to make all humans lizard-like by releasing a chemical cloud from Oscorp's tower, to eliminate the weaknesses he believes plague humanity. Spider-Man eventually disperses an antidote cloud instead, restoring Connors and earlier victims to normal, but not before Lizard mortally wounds Captain Stacy. Before his death, Captain Stacy makes Peter vow to keep Gwen safe by leaving her out of it. Peter initially does so, but later at school suggests to Gwen he may see her again.
In a closing-credits scene, Connors, in a prison cell, speaks with a man in the shadows who asks if Peter knows the truth about his father. Connors replies, "No", and demands Peter be left alone before the man disappears.
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