Following the Battle of New York, Tony Stark and the federal government orders the United States Department of Damage Control to clean the aftermath of the battle, driving salvage company owner Adrian Toomes out of business. Toomes convinces his crew to not surrender the Chitauri technology already scavenged from the battle and use it to further a criminal agenda. Years later, the crew are making big on exotic weapons deals, and Toomes begins wearing a winged harness that gives him the ability to fly.

Following the Avengers' internal dispute and the Flughafen Leipzig-Halle battle in Germany, Peter Parker resumes his studies after Stark tells him he is not yet ready to become an Avenger. Over the objections of his aunt, May Parker, Parker quits his school's decathlon team in order to spend more time focusing on his "Stark Industries Internship", which is a cover for his crimefighting activities as Spider-Man. One night, after preventing Toomes' associates from robbing an ATM, Parker returns to his Queens apartment, where his best friend, Ned Leeds, discovers his secret identity.

The next day, Leeds pesters Parker all day about his abilities as Spider-Man. During gym class that day, Leeds accidentally says Parker knows Spider-Man after hearing a conversation with Parker's love interest Liz and her friends. That night, Parker is forced to go to Liz's party.

While changing into Spider-Man, Parker comes across Toomes' associates Herman Schultz and Jackson Brice selling Chitauri weaponry to local gangster Aaron Davis. Parker nearly drowns while intervening, but is rescued by Stark, who is monitoring the Spider-Man suit he gave Parker and warns him against involvement with the dangerous criminals. Later, angry with Brice for jeopardizing the operation, Toomes accidentally kills him with one of their weapons, and gives his gauntlet to Shultz.

Retrieving a Chitauri weapon left behind by Brice, Parker works with Ned to remove the power core. A tracking device leads Schultz to Midtown School of Science and Technology, but Parker and Leeds manage to evade him. After planting his own tracking device on Schultz and learning that it leads to Maryland, Parker rejoins the decathlon team and accompanies them to Washington, D.C. for Nationals. Working with Leeds, Parker disables the tracker implanted in his Spider-Man Suit and unlocks all its secret features, including the built-in AI that Parker later names Karen.

He later tries to stop Toomes from stealing weapons from Damage Control truck but ends up being overpowered and trapped inside the truck, causing him to miss Nationals. When he discovers that the Chitauri Energy Core is unstable, Parker tracks Leeds to the Washington Monument, arriving just as the core explodes and traps Leeds in an elevator. Evading local authorities, Parker manages to save Leeds and his fellow classmates, including Liz, before the elevator plummets.

Returning to New York City, Parker persuades Davis to reveal Toomes' whereabouts. Confronting Toomes and his associates at the Staten Island Ferry, Parker captures the group's new buyer Mac Gargan, but botches an FBI operation which was attempting to arrest everyone involved in the weapon sales. Toomes avoids after Parker's attempts to shut down a malfunctioning weapon causes it to overload and tear the ferry in half. Stark, who had arranged for the FBI to apprehend Toomes, helps Parker save the passengers.

Afterwards, Stark admonishes him for his recklessness, reminding him he almost killed dozens of people as well as himself. Deciding Parker can no longer be trusted, Stark demands the suit back. Peter is left very upset, deciding afterwards to distance himself from Spider-Man and instead begins concentrating on his personal life. To that end, he finally makes a date with Liz and arranges to take her to the upcoming homecoming dance. Meanwhile, most of Toomes' workers decide to leave the operation now they know Stark is on their trail. With most of their Chitauri technology gone, Toomes decides to make one final hit which will set him and his few remaining associates up for life.

On the night of the dance, Parker goes to Liz's house to pick her up only to get the shock of his life when he learns that Liz's father is none other than Toomes. Parker only just manages to maintain his composure, however during the car ride to the dance Toomes learns that Peter went missing whenever Spider-Man was around and deduces his secret. When Liz is out of the way, Toomes tells Parker he'll let him live since he saved Liz in Washington, but warns he'll show no mercy if he continues to interfere with his plans. During the dance, Parker realizes Toomes is planning to hijack the Stark Cargo Plane transporting weaponry from Avengers Tower to the team's new headquarters. Although unsure if he can defeat Toomes without Stark's advanced tech, Parker realizes he cannot abandon his duties and leaves the dance, dons his homemade Spider-Man suit and races to Toomes' lair to confront him.

Parker is first ambushed by Schultz but defeats him with the help of Leeds. He then confronts Toomes in the lair, who attempts to persuade him to his side. When Parker refuses, Toomes destroys the building's support beams and leaves him to die under the rubble. Parker overcomes his self-doubt and escapes, before intercepting Toomes onboard the now-damaged plane and steering it towards the beach near Coney Island. The two engage in a confrontation that ends with Parker saving Toomes' life from his own unstable equipment and leaving him for the New York City Police Department.

Sometime later, Parker learns that Liz is moving away and Michelle Jones will be replacing her as president of the decathlon team. After receiving a call from Happy Hogan, Parker was asked to visit the Avengers' facility. Later, Stark offers Parker an even more advanced suit and an invitation to join the Avengers. Parker declines Stark's invitation in favor of remaining a 'friendly neighborhood' Spider-Man and inspires Stark to bring an engagement ring to a press conference where Pepper Potts is present. Upon returning home, Parker discovers that Stark has returned his upgraded suit and puts it on, and looks toward the window. Meanwhile, May is standing behind him the whole time and then cusses in astonishment.

In prison, an incarcerated Gargan approaches Toomes inside the prison and explains that several criminals are banding together to exact vengeance against Spider-Man. When pressured by Gargan about Spider-Man's identity, Toomes denies any knowledge.

In a post-credits scene, Captain America takes part in a public service announcement centering on the importance of patience, and explains how patience can be the key to victory but can also lead to something disappointing after waiting so long. Tired, he then asks how many more announcements he has to make.