On his way to watch girlfriend Mary Jane Watson (Kirsten Dunst) perform in a musical on the stage, Peter “Spider-Man “Parker (Tobey Maguire) stops to watch a video on a television screen of Spider-Man in action and is filled with pride as young children watch the footage with awe and excitement. Sitting in the front row of the theater, Peter delights in seeing Mary Jane singing on the stage but remains unaware of the presence of former best friend Harry Osborn (James Franco) on the stage above. Walking out of the theater at the end of the play, Peter runs into Harry and offers to explain everything to him about the death of his father Norman Osborrn (Willem Dafoe) but Harry refuses to listen and drives off. Back behind the stage, Peter meets up with Mary Jane at her dressing room and calms her nervous inssecurities by assuring her that her performance was great.
Inside of the lair once used by the Green Goblin, Harry steps out of a chamber of green gas and breathes in the air as he eyes the glider and gear built specifically for the New Goblin.
Pursued by a police car cruising through the streets, escaped convict Flint Marko (Thomas Haden Church) climbs up a fire escape and quietly enters the room of a sick young girl who is revealed to be his daughter when he lays a stack of letters all of them returned to the sender by her bedside. Finding new clothes and searching the kitchen for something to eat, Marko is caught sneaking around the apartment by his wife Emma Marko (Theresa Russell) and told that he is not welcome to hide out in their apartment because he is a murderer. Trying to explain that he did it out of desperation because their daughter needs medical care, Marko is interrupted when his daughter appears at the door of his bedroom and, before leaving through the window, he promises her that he willd find a way to get her help no matter the cost.
Laying on a large web in the park, Peter and Mary Jane stare up at the sky as shooting stars fly above them but fail to notice when one of them crashes in the park and releases a black substance that attaches itself to the bike that Peter and Mary Jane ride home. Shortly after dropping Mary Jane off at her home, Peter arrives at the apartment where his Aunt May Parker (Rosemary Harris) lives to inform her that he plans to propose to Mary Jane and, after stirring up memories of his late Uncle Ben Parker (Cliff Robertson), is given the wedding ring that Ben gave to May when he proposed. Riding home on his bike after seeing Aunt May, Peter is attacked by the New Goblin and, after a violent confrontation, is forced to incapacitate Harry by sending him crashing down an alley. Taking him to the hospital, Peter discovers that Harry has suffered some memory loss and no longer remembers ever hating Peter.
At the police station, Captain George Stacy (James Cromwell) receives word from a police officer that Flint Marko is being pursued on foot by officers and should be in police custody soon. Out in the outskirts of the city, Marko is fleeing from a team of police officers and their dogs when he leaps the fence of a scientific testing facility and falls into a particle accelerator filled with sand. Caught in the middle when the machine is activated, Marko watches in shock as his body is transformed into sand and he disappears into nothingness as the police arrive to find no one inside the particle accelerator. But, after the police have left the area, Marko gradually pulls himself together and walks off with a newfound determination to get his daughter what she needs to improve her health.
Arriving at his apartment the next day, Mary Jane shows Peter a review of the play that pans her performance but Peter tells her not to be concerned with it because it is just the opinion of one critic. Then, alerted to an impending disaster by a police scanner in his apartment, Peter exits the apartment as Spider-Man and discovers that a crane has become erratic and his tearing through buildings one of them throwing the beautiful Gwen Stacy (Bryce Dallas Howard) from a building as her police captain father watches from below. Arriving in the nick of time to rescue Gwen, Spider-Man is startled when he is confronted by ambitious photographer Eddie Brock (Topher Grace) and told that Peter Parker is an amateur and Eddie will now be the one taking all of the action photos of Spider-Man. Back at the apartment, Mary Jane leaves without noticing that the black substance from the meteor that crashed in the park has now managed to infiltrate the apartment and is waiting for Peter to return home.
At the Daily Bugle, Eddie manages to talk his way into the office of J. Jonah Jameson (J.K. Simmons) and competes with Peter to get his photograph of Spider-Man on the cover of the newspaper. Revealing that the Daily Bugle needs a new staff photographer, Jameson tells the two of them that the first one to get a picture of Spider-Man committing a crime will be the new staff photographer. When Harry is released from the hospital, Peter is surprised to find that Harry has become the happy young man that he used to be but Peter becomes increasingly worried that Harry will eventually revert back to his sinister self once he regains the memories he lost from the past several months. At the theater, Mary Jane arrives for rehearsal only to discover that she has been replaced because of the fact that critics all over town have been giving her performance less than stellar reviews.
Discovering that he is to be honored for saving the daughter of the police captain, Peter is excited by his popularity in New York City and begins showing signs that he is letting his pride get the best of him as he totally neglects Mary Jane as he plans out his grand entrance to the huge public ceremony being held for Spider-Man. On the stage where Spider-Man is to be presented with a key to the city, Gwen runs into Eddie and is forced to explain to him that they’re not really dating because they only had coffee together once. Arriving at the celebration, Harry congratulates Mary Jane on her part in the play but she quickly explains to him that she was replaced and won’t be performing anymore. Walking down the street, Marko is identified by a pair of police officers who attempt to arrest him but lose him when he disappears into a dump truck hauling sand as its cargo. Making his grand appearance at the ceremony, Spider-Man hangs upside down from the stage and allows Gwen to kiss him to satisfy the demands of eager onlookers but Mary Jane is not too happy about Peter kissing another girl.
Traveling through the city as a cloud of sand, Marko interrupts the celebration and attempts to rob an armored truck but is stopped when Spider-Man thwarts his heist after engaging in a confrontation that leaves Peter emptying the sand out of his outfit. Taking Mary Jane out to an expensive restaurant to propose to her, Peter soon finds his marriage proposal derailed when Gwen spots him at dinner and reveals to Mary Jane that the two of them are classmates which makes Mary Jane wonder if it was either Spider-Man or Peter who kissed Gwen on the stage. Back at his apartment, Peter tries to call Mary Jane to talk to her but instead receives a call from the police station asking him and Aunt May to come down for a talk with the police captain. Meeting with Captain George Stacy, Peter discovers that Marko has turned out to be the real culprit behind the death of his Uncle Ben and that the man he let die for the crime was the not the man responsible for his murder. Sitting in his apartment waiting for the police scanner to help him find Marko, Peter receives a visit from Mary Jane but he rejects her attempts to comfort him and he continues to listen intently for the reports on the police scanner that might help him find Marko.
Lying mentally exhausted in his bed while still wearing his suit, Peter sleeps as the black substance from the meteor emerges and bonds with his suit changing the color of his suit but also enhancing his confidence and abilities. Suddenly discovering that Marko is robbing a bank, Spider-Man rushes to the scene to find that Marko has disappeared into the sewers but, before Spider-Man gives chase, he makes sure that Eddie who is the on the scene gets no pictures of him by smashing his camera against the wall of the bank. Descending into the sewers, Spider-Man battles with Marko and, after discovering that Marko is vulnerable to water, floods the sewers and watches in satisfaction as Marko turns into mud and disappears through a sewer grate. Explaining to Aunt May that Marko has been killed by Spider-Man, Peter is startled when Aunt May expresses her displeasure over the news as she explains that the last thing Uncle Ben would want is for Peter to have murder in his heart.
Taking a piece of the black substance to Dr. Curt Connors (Dylan Baker), Peter discovers that the substance is a symbiote and is warned by his professor that the symbiote will attempt to bond with a host and separating the two can be very difficult. Looking for someone with whom she can talk, Mary Jane has dinner with Harry but things take a turn when the two of them end up kissing and Mary Jane leaves. Distraught after she leaves the mansion, Harry begins suffering from hallucinations of his father and, in a flash, all of his memories return to him. Donning the guise of the New Goblin, Harry surprises Mary Jane in her apartment and forces her to do something for her in order to save the life of the man that she loves. Meeting Mary Jane at a park upon her request, Peter is heartbroken when she tells him that she is leaving him for another man as Harry watches and smiles from a distance. Meeting up with Peter at a diner afterwards, Harry tells Peter that he is the other man and Peter is disbelieving as he flees the diner.
Despondent in his apartment, Peter decides to wear his black symbiote suit and confronts Harry at the mansion but the two of them engage in a violent fistfight that climaxes with Peter tossing a bomb in the face of the young man who used to be his best friend. Overcome by the corrupting power of the symbiote, Peter decides to continue wearing it and is soon shocked to find that Eddie has stole the staff photographer job out from under him by creating a fake photograph of Spider-Man making off with a bag of stolen cash. Confronting Eddie and revealing that he has evidence proving that the photograph was forged, Peter hands over the evidence to J. Jonah Jameson and watches as Eddie is humiliated in front of everyone when Jameson fires him. Soon, Peter becomes completely corrupted by the symbiote as his appearance changes and his behavior in public becomes intolerable and disgusting to everyone who cares about him. Out in the outskirts of the city, Marko manages to collect himself from the water and the mud leaving the sewers and he heads back towards the city.
Deciding to get some payback against Mary Jane, Peter takes Gwen out on a date to the club where Mary Jane is working as a waitress and attempts to make her jealous by parading around with Gwen in his arms. Realizing that he is just using her to get back at Mary Jane, Gwen leaves and Peter confronts Mary Jane only to mistakenly strike her when he gets in a scuffle with the bouncer. Horrified by what he has become, Peter seeks refuge in the bell tower of a church where he attempts to separate himself from the symbiote and finds that the booming noise of the church bell weakens the symbiote. Below him, Eddie sits in the church and begs for God to take the life of Peter Parker now that Peter has ruined his career and his life but Eddie overhears screams coming from the bell tower and looks up at Peter struggling to rip free from the symbiote. Watching as Peter manages to rid himself of the symbiote, Eddie becomes engulfed by the symbiote as it falls from atop the bell tower and soon becomes a hulking black creature with the same strengths and abilities as Spider-Man.
Returning home to his apartment, Peter receives a visit from Aunt May and he attempts to give her back her wedding ring but she insists that he keep it because she knows that he can make things right again with Mary Jane. Out in the city, Venom tracks down Marko and, offering him the chance to take down Spider-Man once and for all, the two of them decide to join forces. Catching a taxi to go and see Peter, Mary Jane is startled when Eddie turns out to the cab driver and he knocks her unconscious. News vans and bystanders begin gathering around a construction site where Venom has suspended the taxi cab in a black web near the top of a building being constructed while Marko has surrounded the place with sand so he can easily thwart any attempts by the police to rescue Mary Jane. Seeing this standoff on the television, Peter turns to Harry who is now disfigured after being hit by the bomb for help in taking on the two villains but Harry refuses to help him. Shortly after Peter departs, Harry is in his lair when his butler appears and explains to him that, when he cleaned the wounds of his late father, the wounds were from his own glider and were self-inflicted meaning that Peter was not at fault.
Arriving at the construction site, Spider-Man attempts to rescue Mary Jane when Venom drops in on him and explains to that Peter is going to going to lose everything because Peter did the same thing to Eddie. Falling from the black webbing during his fight with Venom, Spider-Man drops down into the sand at the bottom of the construction site and watches in horror as Marko emerges as a behemoth of sand. Eventually subdued by Venom and held down, Spider-Man is pulverized by Marko until, as Marko is about to land a final blow, the New Goblin tosses a bomb in the neck of Marko and sends Venom flying by dealing him a blow from his glider. Teaming up to rescue Mary Jane, Spider-Man manages to get Mary Jane to safety while the New Goblin sends Marko collapsing to the ground. Going head to head with Venom, the New Goblin sacrifices himself to save Spider-Man when Venom attempts to stab Spider-Man in the chest with the glider. Remembering that the symbiote is weakened by loud noises and vibrations, Spider-Man traps Venom in a circle of poles that he uses to make several piercing noises with as he manages to temporarily separate Eddie and the symbiote. Refusing to give up the power that comes with the symbiote, Eddie launches himself at the symbiote just as Spider-Man detonates a bomb from the glider inside of the circle and incinerates both Eddie and the symbiote.
Coming face to face with Marko, Peter learns that Marko shot his Uncle Ben on accident and that he has regreted every day of his life because all he wanted was to take care of his daughter. Forgiving Marko for shooting his uncle, Peter watches as Marko disintegrates into sand and disappears. Finding a dying Harry with Mary Jane at his side, Peter is tearful as he thanks Harry for saving his life but Harry is happy because he gave his life to save his best friend.
After the funeral, Peter shows up at the club where Mary Jane works and dances with her as the two of them begin mending their relationship.
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