As a teenager, Peter is a student at Midtown Science High School, where he is bullied by Flash Thompson, and is
romantically interested in the beautiful Gwen Stacy, the daughter of police captain George Stacy. At home, Peter
discovers his father's documents, and learns he had been working with scientist Dr. Curt Connors at Oscorp to combine human and animal DNA to cure illnesses. Peter sneaks into Oscorp to meet Connors, who is pressured by his superior Dr. Ratha to complete his serum, and cure the terminally ill head of Oscorp Norman Osborn. Connors wants the cure himself to restore his missing arm. Meanwhile, Peter breaks into a lab where a "bio-cable"—a high strength strand of webbing—is created by genetically modified spiders, one of which bites him. During a subway ride home, a fight reveals that he has developed superhuman speed, strength, the ability to stick to surfaces, and a heightened sense of danger.
Peter finds an algorithm in his father's documents and gives it to Connors−the missing key to his serum. In school, Peter damages school property during a confrontation with Flash and Ben is forced to work late so that he can pick up Peter. Ben tells Peter to escort May home that night. Peter ignores Ben in favor of helping Connors test their serum on a three-legged mouse. After he returns home, Peter argues with Ben about not picking up May. Ben then recounts Richard's philosophy of responsibility to Peter, who only leaves in anger after pointing out the hypocrisy. At a grocery store, the clerk rudely refuses to let Peter buy a drink, and when a thief steals money from the register, Peter lets the thief escape. Ben, searching the streets for Peter, confronts the thief, but is shot and killed. Peter responds to the gunshot and finds Ben's body. After seeing a police sketch of the suspect, Peter realizes it was the thief he let go.
Peter hunts the killer, taking out other criminals as a result and attracting police attention for his vigilante actions. During one confrontation he falls into an abandoned gym, where a luchador-wrestling poster inspires him to create a mask to hide his identity. He creates a costume for himself with a spandex suit, and builds wrist-mounted mechanical devices that shoot biocable strands. Peter, after going to Gwen's house for a dinner "date" with her family, later reveals he is the vigilante to Gwen and they kiss.
Seeing that the test mouse has regrown its missing limb using lizard DNA, Ratha demands human trials begin immediately. Connors refuses to risk innocent lives and is fired. Desperate, Connors tests the serum on himself and his missing arm regenerates. He learns that Ratha is going to test the serum on human subjects and goes to stop him, but his body begins to mutate. By the time he finds Ratha on the Williamsburg Bridge Connors has transformed into a large Lizard-like creature, tossing cars, including Ratha's, over the side of the bridge. Peter, now calling himself Spider-Man, manages to save Ratha and other civilians. Connors retreats into the sewer and reverts to human form.
Peter later meets Connors in his office and suspects he is the Lizard, and later unsuccessfully confronts Connors' Lizard form in the sewers, leaving behind his camera. Connors learns Peter's identity via the name on the camera and pursues him to Midtown Science High School where they fight. In response, the police start a manhunt for both Spider-Man and Lizard. Connors heads to Oscorp, intending to disperse his serum across the city and make everyone into lizards, while Gwen develops an antidote in Oscorp's lab. The police corner Spider-Man and Captain Stacy discovers that he is Peter, but lets him escape to go save Gwen. With the help of the father of a boy he rescued earlier, Spider-Man reaches Oscorp in time. Spider-Man manages to replace Connors' serum with the antidote, reverting Connors to human form, but not before Connors mortally wounds Captain Stacy. Spider-Man nearly falls to his death, but Connors saves him. Before his death, Captain Stacy makes Peter promise to stay away from Gwen for her safety. He initially keeps the promise, but later admits to Gwen that failed promises are the best kind; she responds to this with a smile.
In a post-credits scene, Connors, in a dark prison cell, is confronted by a man in the shadows who asks if Connors told Peter the truth about his father. Connors replies, "No", and demands Peter be left alone before the man disappears.