It has been two years since the end of the last film, and Peter Parker is finding a double life very difficult. He loses a job, faces financial difficulties, is having trouble with his estranged friend, Harry Osborn, who still blames his father's death on Spider-Man (Harry doesn't know that Norman was actually the villanous Green Goblin of the first film or that Peter is Spider-Man, but is angered that Parker's trust lies not with his best friend, but with Spider-Man, his "bread and butter"), struggles with his studies and school work, as Professor Curt Connors reprimands him, and finds that he is losing his powers. Moreover, he has learned that Aunt May is being threatened with foreclosure on her house and his potential girlfriend, Mary Jane, has acquired a new boyfriend, John Jameson, the son of Peter's employer, J. Jonah Jameson. M.J. turns increasingly hostile to Peter after he fails to keep a promise to see a play in which she is the female lead. Further, he questions if he could ever have what he "needs," a life as Peter Parker, which climaxes in a vision involving Uncle Ben.

Peter's idol, a brilliant, gentle scientist named Otto Octavius, has developed a set of powerful mechanical arms which he wears while performing a fusion experiment. When the experiment goes haywire, Octavius's wife is killed, his career is ruined, and the mechnical arms take control of his mind (the mental overriding chip that allowed Octavious to not be controlled by the arms was destroyed in the accident) and force him to focus on continuing the experiment at all costs. Soon after, Doctor Octopus (or "Doc Ock"), as he is now called (due to the metal tentacles wired to his spine), begins to embark on a life of crime to finance the rebuilding. Octavius attempts to rob a bank where Peter Parker and his Aunt May happen to be present. As Spider-Man, Peter foils the robbery, but Octavius takes Aunt May as a hostage. When Spider-Man rescues her, she revises her former opinion of the wall-crawler and realizes that he is a hero. Nevertheless, Peter finds that his responsibilities as Spider-Man increasingly put his loved ones in danger and rob him of the ability to lead a fulfilling personal life. His morale hits a nadir when Harry lashes at him in a drunken rage, M.J. and John Jameson announce their engagement, and he loses his powers due to a form of burn-out syndrome. Peter resolves to give up Spider-Man, shirking his responsibilities.

As Peter has much more spare time now, not only does he excel at his physics courses, but at least one of his relationships improves. Peter and Mary Jane connect once again, but as Mary Jane is engaged, it seems too late. Aunt May is distressed by Peter's confession that he was somewhat responsible for his Uncle Ben's death. Soon after. though, she sees his bravery in admitting the truth and inadvertently inspires him to become Spider-Man once more, as she speaks of how Spider-Man gives hope to others and that one must do things for the greater good in spite of their dreams. In the meanwhile, Doctor Octopus and Harry Osborn, now head of Oscorp's research division, make a deal: Harry supplies him with tritium for his experiment, and Octavius agrees to capture Spider-Man for him.


Mary Jane remembers the upside-down kiss she had with her savior Spider-Man in the first film, and that Peter's kiss suspiciously felt the same. She arranges a meeting with Peter, and although she is very fond of him, Peter's secretive behavior estranges and intrigues her. She asks if Peter still loves her, but Peter—who has decided to become Spider-Man once again, and is unwilling to risk exposing her to the danger of a superhero's life—regretfully tells her that he does not. Before things can go on, the two are attacked by Doctor Octopus. Because he knows that Peter and Spider-Man are close (although he does not know that they are the same person), Octavius abducts Mary Jane in a ploy to lure Spider-Man into a trap.

This shock brings back Peter's powers. He dons his costume and has a great fight with Octavius, culminating with the insane scientist forcing Spider-Man to rescue a runaway subway train. With the utmost effort, Peter narrowly prevents the train from falling from an unfinished bridge and then loses consciousness. The grateful, awed passengers of the train carry his limp and vulnerable body inside and set him down gently. Peter awakens and is startled by the absence of his mask which is then returned by two young boys. The children and the other assembled passengers vow not to tell anyone of seeing his face. Unfortunately, he is weak from stopping the train and is captured easily by Doctor Octopus, then brought before Harry Osborn. Harry unmasks Spider-Man and is stunned to discover that his sworn enemy is also his best friend. Peter easily breaks free of his bonds and convinces Harry that they need to set aside their conflict for the time being as larger problems are at hand. He then persuades Harry to reveal where Octavius went so he could save Mary Jane from being killed.


Spider-Man finds Doctor Octopus in an abandoned waterfront warehouse on a pier, where he holds Mary Jane hostage and has just re-ignited his doomed fusion experiment, which is clearly going astray just as did the one in the beginning of the film. They fight a second time, and in the end, Octavius regains his sanity. Peter reveals his true identity and reiterates some advice given him by Octavius prior to his tragic fall from grace. This triggers an epiphany in Octavius where he realizes the monstrosity of his recent actions. Determined to end his doomsday experiment before it causes anyone harm, Octavius uses his mechanical arms to collapse the floor of the building, plunging himself and the fusion device into the water below, snuffing it out permanently. Dr. Octavius is apparently killed in the process but ends up dying a hero (his last words are, "I will not die a monster!"). Mary Jane sees Peter without his mask and realizes that he is Spider-Man, and is in awe and full of joy at the same time. But Peter tells her they can never be together, as he will always have deadly enemies, and says she should spare herself the grief of coming too close to him.

As he hears of the warehouse disaster in his penthouse, a distraught Harry Osborn meets face to face with his father, the late Norman Osborn in a hanging mirror. The hallucination of Norman demands that his son kill Peter Parker to avenge his death. This, for the first time, marks Harry's possible departure into mental decline. Horrified at the thought of harming his best friend, Harry hurls a dagger at the mirror, shattering it and revealing a hidden passageway which leads to a secret room in the attic. Confused, disoriented, and surrounded by a cache of advanced weaponry and equipment, Harry focuses on a Goblin Glider in the center of the room and realizes that his father was the infamous Green Goblin. He also discovers glass cylinders containing the performance-enhancing chemical compound which gave Norman Osborn his superhuman abilities as well as triggering his insanity. This is a clear lead-up to Harry donning the mantle of the second Green Goblin in the third film as he does in the comics.

In the end, Mary Jane Watson runs away from her marriage with John Jameson. She gatecrashes Peter's apartment, telling him that she has decided to live with him - despite the risks - because a full dangerous life is better than a half, carefree life. She - almost forcefully - persuades Peter to finally be her boyfriend while accepting the need of his vows by letting him respond to a sudden call for help. As Peter joyfully swings to the rescue, Mary Jane remains, still somewhat apprehensive of the bizarre and potentially dangerous relationship they have committed themselves to.