Following the Battle of New York in 2012, Adrian Toomes and his salvage company are contracted to clean up the city, but their operation is taken over by the Department of Damage Control (DODC), a partnership between James Rhodes, Pepper Potts, and the U.S. government. Enraged at being driven out of business, Toomes persuades his employees to keep the Chitauri technology they have already scavenged and use it to create and sell advanced weapons, including a flying Vulture suit Toomes uses to steal Chitauri power cells.
Eight years later, Peter Parker is drafted into the Avengers by Rhodes and Potts to help with an internal dispute in Germany, but resumes his studies at the Midtown School of Science and Technology when Rhodes and Potts tell him he is not yet ready to become a full-time Avenger. Parker quits his school's academic decathlon team to spend more time focusing on his crime-fighting activities as Spider-Man. His best friend, Ned, eventually discovers his secret identity.
Parker comes across Toomes' associates Jackson Brice / Shocker and Herman Schultz selling weapons to local criminal Aaron Davis. Parker saves Davis before being caught by Toomes in the Vulture suit and dropped in a lake, nearly drowning after becoming tangled in a parachute built into his suit. He is rescued by Rhodes and Potts, who is monitoring the Spider-Man suit they gave Parker and warn him against further involvement with the criminals. Toomes accidentally kills Brice with one of their weapons and Schultz becomes the new Shocker.
Parker and Ned study a weapon Brice left behind, removing its power core. When a tracking device on Schultz leads to Maryland, Parker rejoins the decathlon team and accompanies them to Washington, D.C. for their national tournament. Ned and Parker disable the tracker Rhodes and Potts implanted in the Spider-Man suit, and unlock its advanced features. Parker tries to stop Toomes from stealing weapons from a DODC truck but is trapped inside, causing him to miss the decathlon tournament. When he discovers that the power core is an unstable Chitauri grenade, he races to the Washington Monument, where the core is activated and explodes, trapping Ned and their friends in an elevator. Parker saves them, including his classmate and crush Liz. Days later, in New York City, aboard the Staten Island Ferry, Parker captures Toomes' new buyer Mac Gargan but Toomes escapes and a malfunctioning weapon tears the ferry in half. Rhodes and Potts help Parker save the passengers, but confiscate his suit as punishment for his recklessness.
Parker returns to his high school life and asks Liz to go to the homecoming dance with him. On the night of the dance, he discovers that Toomes is Liz's father. Deducing Parker's secret identity, Toomes threatens him. Parker realizes Toomes is planning to hijack a DODC plane transporting weapons from Avengers Tower to the team's new headquarters in Upstate New York. He leaves the dance and dons his old homemade Spider-Man suit. Though he is ambushed outside by Schultz, he defeats him with Ned's help. He races to Toomes' lair, where Toomes attacks Parker, destroying the building's support columns, and leaves Parker to die, trapped in the rubble of the collapsed building. Parker escapes and intercepts the plane, steering it to crash on the beach at Coney Island. He and Toomes continue fighting, ending with Parker saving Toomes' life after the damaged Vulture suit explodes. Parker leaves Toomes for the police along with the plane's cargo. After her father's arrest, Liz moves away. Parker declines an invitation from Rhodes and Potts to join the Avengers full time, and Rhodes proposes to Potts. Rhodes and Potts also return the Spider-Man suit to Parker, who puts it on just as his Aunt May walks in.
In a series of mid and post-credits scenes, an incarcerated Gargan approaches Toomes in prison, saying he has heard that the latter knows Spider-Man's real identity, though Toomes denies this; Thor and Loki discuss about going back to Earth when an unidentified spacecraft approaches them; and Shuri helps Bucky Barnes with his recuperation.