In a cat-filled mausoleum in Central City, Denny Colt (Gabriel Macht), also known as the masked vigilante The Spirit, receives a phone call from Detective Sussman (Dan Gerrity) about something big going on near an old shipwreck in the mudflats, something that could involve the Spirits arch-nemesis, The Octopus (Samuel L. Jackson). The Spirit dons his costume and travels across rooftops while delivering a voice-over soliloquy about the city being his one true love. A woman (Kimberly Cox) is being mugged in an alley below. He manages to save her, receiving a knife wound that he seems to not even notice. The woman asks, What are you? The Spirit runs away, catching a ride from Officer Liebowitz (Frank Miller) and heading toward the flats.
At the swampland, a beautiful femme fatale, Sand Saref (Eva Mendes), rises from the water and appears to shoot Sussman multiple times. The Spirit and Liebowitz find the wounded Sussman, but a flashback reveals that it was really the Octopus who shot him in an effort to recover two identical chests underwater. Sand and her husband Mahmoud (Eric Balfour) tried to flee with both chests, but the Octopus wounded Mahmoud and snapped a line connecting the two chests. Sand escaped, leaving one chest behind, which the Octopus retrieved from the murky depths.
After the Octopus kills Liebowitz by ripping his head off, he sends away his cloned henchmen, Ethos, Pathos, and Logos (all played by Louis Lombardi), to be alone to take on the Spirit. Octopus accomplice Silken Floss (Scarlett Johansson) drives up, running over Pathos in the process. She departs with the cargo, expressing her thoughts that the Spirit and the Octopus will be at it all night.
The two enemies do indeed take part in a long and highly stylized fight. A still quite alive Pathos shoots the Spirit, putting the hero down for the count, while the Octopus claims that he and the Spirit share a connection in their capability to take such great amounts of punishment.
The Spirit is awakened by his lover Dr. Ellen Dolan (Sarah Paulson), daughter of Police Commissioner Dolan (Dan Lauria). Appearing to be in perfect health despite his gunshot wounds (something which has occurred seemingly many times before), the Spirit is reluctant to be admitted to a hospital but Ellen insists. He is shocked to notice a gold locket in Sussaman's hand; a piece torn from Sand Sarefs neck earlier. He is berated by Commissioner Dolan, the only person who knows the Spirits true identity, for the loss of two officers due to going after the Octopus without permission or backup.
Sand Sarefs locket contains pictures of a much younger Denny Colt (Johnny Simmons) and Sand (Seychelle Gabriel). The two grew up together in Central City. Denny bought Sand the locket as a gift to satisfy the girls love of diamonds and other such shiny things, including the Golden Fleece of Jason and the Argonauts. They lived happily until Sands father, a cop, was accidentally shot dead one night in a struggle between a mobster and Dennys uncle, a washed-up (and presumably alcoholic) boxer who then committed suicide. Sand said she now hated cops. Fleeing to Europe, she was never heard from again for fifteen years. With her back in Central City, the Spirits interest is obviously piqued. He concludes that her desires of youth have evolved into a criminal career.
In a secret lair, the Octopus and Silken Floss open the chest but discover that it does not contain the mysterious Blood of Heracles as expected, but an unseen object that produces an otherworldly glow. Incandescent with rage, the Octopus exaggeratedly slaughters three of four more cloned thugs and orders a fourth to commit seppuku. He learns of Sands involvement in the mixing up of the chests and the villains decide a trade is in order.
Sand and Mahmoud visit the office of a high-class fence named Donenfeld (Richard Portnow), whom Sand paid to locate the underwater treasure she wanted -- the Argonauts Golden Fleece. It is implied that Donenfeld gave up the treasures location to the Octopus as well to ensure his familys safety. For selling her out, Sand transfers Donenfelds payment into another account, then persuades the fence to shoot himself.
At St. Alices Hospital, the Spirit has fully regenerated good as new. He nearly seduces Ellen, but she has a clearer understanding than expected of the Spirits tendency to fall in love with every woman he meets. Commissioner Dolan angrily enters with young rookie cop Morgenstern (Stana Katic) and calls the Spirit away to a case.
Sand's history as one of the worlds great jewel thieves is relayed to the Spirit, the cops both unaware of his past life with the suspect. Unable to believe Sand could be a criminal, the Spirit tracks her down. He is about to arrest her when caught off-guard by her standing before him fully nude. He also sees that Mahmoud has died due to tasting the Blood of Heracles. Sand doesn't recognize the Spirit as the presumed-dead Denny. She is stunned when he reveals his knowledge of her looking for the Golden Fleece. Sand shoves the Spirit through a window. His trenchcoat stops his fall when it snags on the horn of a gigantic ram statue.
Morgenstern calls with a lead: Pathos was found near the mudflats with his shoes covered in industrial salt. It allows the Spirit to deduce that his nemesis is headquartered under the Feiffer Industrial Salt plant. After taking down several clones, he enters a sewer tunnel and comes face-to-face with Floss, who kisses the Spirit as a distraction while she injects a knockout agent into his neck.
In the Octopuss lair, the Spirit awakens to find himself tied to a dentists chair and surrounded by Nazi paraphernalia. A beautiful belly dancer sensuously dances behind a curtain, prompting the Spirit to break the fourth wall and claim to recognize her as the strangest woman he has ever encountered. It is revealed to be Plaster of Paris (Paz Vega), a psychotic assassin. The Octopus enters after a message from Sand an exchange of the Golden Fleece and the Blood of Heracles has been arranged at the city projects. The Spirit is told the story of the Octopus's quest for immortality. His and Flosss experimentation eventually led to the creation of a serum (something of a scientific equivalent to the Elixir of Life) that could grant immortality or, at least, nigh indestructibility. Dennys corpse was used as a test subject. He awoke in a casket, broke out of his grave, and went to see Commissioner Dolan, creating a new identity to fight crime as a police spy. The Octopus injected himself and arch-enemies were born.
The Octopus intends to drink the mystical Blood and expand his immortality toward becoming a god. But first he intends to kill the Spirit by having Plaster slice him into tiny bits. She instead cuts him loose when reminded of a romantic encounter. The Spirit then gives the Octopus a beating, crushing him under a large Reichsadler eagle statue. He escapes with Plaster and they kiss, only for her to impale the Spirit on her sword.
Bleeding profusely, he stumbles to the city docks, collapses into the water and confronts the beautifully ethereal Angel of Death, the siren Lorelei (Jaime King), who has haunted the Spirits sleep. He is the only man to have ever wrongfully escaped death. His hallucinations lead to surreal images of her taking him where he truly belongs. But he manages to gather his senses by remembering Ellen, Sand, and the city all needing him. As the Spirit swims to the surface, Lorelei vows vengeance.
The Spirit is again put into Ellens critical care in the hospital. At the projects, Sand and her lastest henchman fly in with the Blood of Heracles to meet Floss and a clone carrying the Golden Fleece. After a four-way standoff, Sand attempts to convince Floss to get out of serving the Octopus before he kills her. They transfer the treasures and both minions are shot, at which point the Octopus emerges from his truck. He asks Floss for the vase. Unable to take a side, Floss drives off as the Spirit suddenly materializes.
The Octopus unloads with progressively bigger guns, downing him with a pair of four-barreled shotguns. Dolans SWAT team then storms the area and opens fire. The carnage ends when Morgenstern uses a huge combination RPG to blow off one of the Octopuss arms and Dolan shoots him in the head. The Octopus gets to the Blood of Heracles and prepares to drink it, but Sand shoots the vase just in time. The Spirit then uses a grenade to blow the Octopus to smithereens.
Showdown over, the Spirit gives Sand her locket back. They kiss as Ellen looks on, feeling betrayed. The old flames bid each other goodbye and the Spirit convinces Dolan to let Sand go in gratitude for saving the world. He tries to patch things up with Ellen, but she accepts that their relationship will always be fractured. Elsewhere, Floss discovers the Octopuss severed finger crawling toward her. She picks it up and departs with it, planning to clone the octopus.