At the end of the previous issue, Peter Parker returned to his apartment to find Gwen Stacy alive. At the start of this issue (set five minutes after that scene), Peter has a vision of Spider-Man telling him that the stress has gotten to him from all his years as Spider-Man and that he's gone crazy. Peter tries to work out what happened, and dismisses Gwen Stacy as an imposter. He yells at Gwen then leaves his apartment and changes to Spider-Man. While this is happening, Mac Gargan, the villain formerly known as the Scorpion, is released from prison as his sentence has been served. Mac thinks that now he's free, he's going to got back to being the Scorpion.
By now, Spider-Man has arrived at the hospital where Aunt May is after she collapsed last issue, and visits her. Peter worries because she's being heavily medicated, and that seeing Gwen alive was what caused her to collapse. Whilst Peter visits Aunt May, the Scorpion attacks a bank, and successfully steals a few bags of money from it.
Peter has fallen asleep, and has a nightmare about Gwen's death and the Green Goblin. In the nightmare, he sees that Gwen's alive, and Aunt May dead. Upon his waking up, Peter hears the radio report about how the Scorpion robbed the bank. Peter is ready for some action, and so changes to Spider-Man. Whilst searching for Scorpion, Spider-Man has an adventure with Nighthawk (which is shown in Marvel Team-Up #33), before returning to look for the Scorpion in this issue. Spider-Man is attacked by Scorpion almost immediately, and knocked into a cement processing plant. Their fight leads on for a while, before Scorpion manages to knock Spider-Man into the mixing vat for the cement. He then activates the process for making cement, but Spider-Man escapes from the vat to find Scorpion missing.
Spider-Man then returns home as Peter Parker, where he finds Robbie Robertson, Betty Brant, Ned Leeds, and "Gwen Stacy" there. He once more accuses Gwen of being an imposter, but Ned tells Peter that they checked her fingerprints and that they match Gwen's. What's more, they checked Gwen's grave, and found Gwen's corpse still there.