Peter Parker visits a genetics laboratory with his best friend Harry Osborn and Peter's love interest, Mary Jane Watson. There, Peter is bitten on the hand by a genetically engineered "super spider". After he returns home to his Aunt May and Uncle Ben, he falls unconscious. Meanwhile, Harry's father, scientist Norman Osborn, owner of Oscorp, is attempting to preserve his company's critically important military contract. He experiments on himself with a new but unstable performance-enhancing chemical vapor that hugely increases his speed, strength, and stamina. However, it also drives him insane and he kills his assistant, Mendel Stromm. The next morning, Peter finds that his previously impaired vision has improved and that his body has metamorphosized into a more muscular physique. At school, he finds that his body is able to produce webs and his quickened reflexes help him avoid injury during a confrontation with bully Flash Thompson. Peter later discovers that he has also developed superhuman speed, strength, the ability to stick to surfaces, and a heightened ability to sense danger.
Brushing off Ben's advice that "With great power comes great responsibility", Peter enters a wrestling tournament so that he can get money to buy a car and impress Mary Jane. He wins his match, but the promoter cheats him out of the contest money. When a thief suddenly raids the promoter's room, Peter allows the thief to escape as revenge. He later discovers Ben has been carjacked and killed. Peter chases down the carjacker and confronts him in a warehouse only to realize it was the same thief he let get away. After Peter disarms him, the fleeing carjacker falls out of a window to his death. Meanwhile, Norman Osborn kills several scientists and the military's General Slocum at Quest Aerospace's testing field.
Upon graduating from high school, Peter begins using his abilities to fight injustice, donning a costume and the persona of Spider-Man. Loudmouthed newspaper editor J. Jonah Jameson hires him as a freelance photographer, since Peter is the only one providing clear images of Spider-Man.
Norman is voted off the Oscorp board by the other members, who reveal that they will sell the company to Quest Aerospace after the World Unity Fair. At the World Unity Fair, Peter witnesses Harry and Mary Jane on the balcony of a building with the board members. A mysterious figure riding the stolen glider appears and tosses a bomb at the balcony, damaging it and causing mass panic. In the chaos, the Oscorp board members are killed by another bomb and Mary Jane nearly falls to her death before being saved by Spider-Man. Jameson dubs the mysterious killer the Green Goblin and also paints Spider-Man as the Goblin's accomplice despite contrary evidence. The Goblin attacks the Bugle's offices at the Flatiron Building and, after kidnapping Spider-Man, he offers him a place at his side, but Spider-Man refuses. At the Osborn and Parkers' Thanksgiving dinner, Norman deduces Spider-Man's true identity; the Green Goblin subsequently attacks and hospitalizes Aunt May.
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 learns 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 kidnaps and holds Mary Jane and a Roosevelt Island Tram car full of children hostage alongside the Queensboro Bridge. There, he forces Spider-Man to choose who he wants to save, and drops Mary Jane and the children. Spider-Man manages to save both Mary Jane and the tram car, while the Goblin is distracted by civilians on the bridge who throw various objects at him, showing loyalty to Spider-Man and contempt for the Goblin's evil deeds. The Goblin grabs Spider-Man and throws him into an abandoned building where they battle, with the Goblin gaining the upper hand. When the Goblin boasts of how he will later subject Mary Jane to a slow and painful death, Spider-Man overpowers the Goblin, unmasking him.
Norman begs for forgiveness, but his Goblin persona attempts to remote-control his glider to impale Spider-Man. The superhero avoids the attack using his "spider sense", and the glider kills Norman instead. In his dying breath, Norman tells Peter not to reveal his crimes to Harry. Spider-Man takes Norman's body back to Osborn's house and hides the Green Goblin's equipment, though not before Harry finds him with his father's body. At Norman’s funeral, Harry vows to exact revenge on Spider-Man, believing him responsible for killing his father, 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 attention 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.