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After the traumatic events of the previous film, Spider-man (Tobey Maguire) continues his duties as the Spectacular Spider-man whilst still trying to form a relationship with the beautiful Mary Jane Watson. (Kirsten Dunst) Peter starts to learn what he must sacrifice in order to fulfill his duties as Spider-man, as his attendence at college starts slipping.
Peters lecturer Dr. Curt Conners (Dylan Baker) organises for his dear friend and former colleague Dr. Otto Octavius (Alfred Molina) to meet with Peter in terms of teaching purposes as well as hopes to teach some dicipline. Peter joins Dr. Octavius and his wife where the Doctor explains his profound love for his wife and the promising results his new experiment with tridium may create.
Meanwhile, Mary Jane is audtioning for music productions just off broadway with high hopes for Peter to watch her. When Peters responsibility of Spider-man rears its head, he misses Mary Janes shows and in the process she falls for John Jameson (Daniel Gillies) the son of Peters harsh and arrogant boss of the daily bugle; J Jonah Jameson. (J. K. Simmons) While his best friend Harry Osborn (James Franco) starts to obsess over the assumption Spider-man killed his father.
Peter is left questioning whether or his responsibilites of being Spider-man is worth the trouble its causing his alter ego but reminds himself of the guilt of his uncle Ben's death. The reveal of Dr. Octavius's new experiment comes to the light of day as multiple scientists, Peter and Harry go to witness the new event. Since Harry has taken over his fathers business of Oscorp he supplies the tridium for the experiment. The doctor reveals his new equipment in order to carry out the experiment, a set of 4 mechanical arms which attach to his body. He points out a microchip that keeps him in control of them and not vice versa. The experiment starts to lose control as the tridium is added causing beams of energy to reach out of bounds and smash the ceiling and walls. Panic spreads as Harry demands for the Doctor to stop it all, but he beleives he has it all under control. When a beam of energy strikes the Doctors wife and glass kills her, Spider-Man swoops in to save Harry from impending death. Distraught that his wife has been killed, Otto turns around only to recieve an energy beam that fuses the arms to his body and fries the microchip. Spider-man tears out the energy source and stops the experiment as everyone is escorted to Hospital.
Before surgery, Otto awakes in a frenzy and kills the orderlys with his 'Tentacles' and Doctor Octopus is born.
Peter and his aunt May (Rosemary Harris) go to the bank hoping for a loan to aid them with thier financial difficulties. Doc Ock breaks into the bank by force and attempts to steal all the money in order to Re-create his experiment in an abondoned warehouse. In fear that anyone could be seriously injured including his aunt, Peter changes into Spider-man and battles Ock. Mid-battle he realises his powers aren't working properly, this gives Ock the chance to take his aunt may and climb a building. After another battle Spider-man saves his aunt, but Ock gets away.
Next, Peter is heartbroken after he makes it to one of Mary Janes shows and she reveals she's engaged to John Jameson. This causes Peters powers to malfunction yet again and continue to question whether being Spider-Man is worth it. Heartbroken and unsure of himself, he literally bins the suit and tries to focus on his social life instead. Meanwhile, Doc Ock invades Oscorp and attacks Harry Osborn in hopes of stealing the vital Tridium he can supply. Upon realisation he has none, Harry strikes a deal that if Doc Ock can bring Spider-Man to him alive, he will gather enough Tridium as a reward. Harry gives him Peter Parkers name as he knows he takes multiple Spider-Man photos for the Daily Bugle. After Ock has left, Harry realises what he has just sent after his best friend.
Because of Peter's decision to give up Spider-Man, he gains a newfound confidence. He decides to share his secret identity with Mary Jane. A passionate talk at a cafe' is disturbed as Doc Ock breaks in stealing Mary Jane away. This forces Peter to pick up his costume (Now as the Daily Bugle, much to J Jonah Jamesons discontent) and chase Ock. They meet on a train and fight an incredibly grueling battle. Ock destroys the Train controls and escapes leaving Spider-Man to save everyone on board. Using his webs, he stops the train but passes out due to exhaustion. He is unmasked by the train passengers who are shocked to see he is only a young man. Ock returns and sucker punches Spidey only to whisk him away.
At Oscorp, Spidey is dropped off for Harry and lays unconscious upon a table, Ock leaves with his Tridium. Harry, wielding a knife unmasked Spidey only to learn he is actually his best friend Peter. Peter wakes up and informs Harry theres no time to explain, Mary janes been kidnapped. Harry, shocked lets him go. As Peter goes off as Spider-Man in search for Ock, Harry hallucinates and see's his father talking to him, pointing him to his hidden laboratory. Harry walks through to discover the Goblin Serum, glider and masks.
When Spidey finds Ock, the experiment has begun. The final battle insues which results in Spidey's mask being torn, revealing his face. Mary Jane notices this during the fight. Ock is hit hard as the experiment starts to lose control. Peter reasons with Ock and begs him to stop it, he reveals it can't be stopped only drowned. As Spidey saves Mary Jane, Ock tears down the experiment and the whole warehouse with it. Stopping the reaction, but drowning himself in the process.
Without a chance to talk, Spidey lets Mary Jane go, and run into her fiancee's arms.
The next day Peter refuses to go to Mary Janes wedding but is suprised as she shows up at his flat. After sharing a kiss, its revealed she left John for Peter. Unfortunately for Peter, Police sirens are heard, looking at Mary Jane she smiles and utters the famous line 'Go Get 'em Tiger'.
The Film ends as Spidey swings from his flat window with Mary Jane Looking on.