In the quiet mining town of Prosperity, Arizona, an accident involving a rabbit causes a barrel of toxic waste to land in a reservoir. An exotic spider farmer named Joshua (Tom Noonan) has been making regular visits to the site, where he collects crickets for his spiders. Although the spiders have ingested the toxins, he is oblivious since the arachnids seem unaffected. Joshua shows Mike (Scott Terra), a local boy, his collection, which includes the orb-weaving spider named Consuela. After Mike leaves, Joshua is bitten by an escaped tarantula and accidentally knocks down the spider cages. He is killed by the spiders and, after devouring him, the spiders grow to even huger proportions. His pet parrot is also presumed killed, when a tarantula grabs onto its head.
On his way home, Mike is accosted by his mother, Sheriff Sam Parker (Kari Wührer) and Deputy Pete pulling the toxic barrel out of the pond. Wade, the Mayor of Prosperity, is holding a town meeting in the mall about whether they should sell the mines and relocate. Chris McCormick (David Arquette), whose father owned the mines before he died ten years ago, shows up and stands against Wade's proposition. Chris also sparks a romance with Sam.
Meanwhile, Harlan Griffiths (Doug E. Doug), an eccentric extraterrestrial enthusiast, is broadcasting his theory that various missing pets around town have been abducted by extraterrestrials. Inevitably his theory is dismissed as the product of a deranged imagination. Mike sneaks out on foot and finds Joshua and the spiders missing, the farm covered in webbing, and the dead body of Joshua. Although he sees an enormous spider shadow in the mines and tells Chris that the spiders have grown to enormous sizes, based on a giant spider leg he found at the mine entrance, Chris disbelieves his story. Meanwhile, the mines have reopened with the miners searching for a famous gold lode.
One miner is eaten by a gigantic spider, whose clan have made the mines their home. Seeing as the entire town is connected in some way to the mines, spiders show up in many different places. Ashley breaks up with her boyfriend Bret, and he and his motorcyclist friends are chased by jumping spiders, with him being the only survivor, accidentally cutting off the telephone line and being stuck in the mine. Chris finds out that his Aunt Gladys and her dog are abducted by a male orb weaver in their basement. Sam is convinced Chris and Mike are delusional. However, her skepticism fades when she witnesses a giant male orb-weaver attempting to abduct Ashley, her daughter and Chris; Sam saves them both.
Sam contacts Pete and tells him to bring all guns in the police station's possession and they escape to Harlan's trailer, knowing he has a radio station that he operates from within his trailer. As Sam broadcasts the threat over the radio, a giant tarantula, the "tank" of the horde, assaults the trailer but they manage to escape. As the town is besieged by vicious spider horde, Sam tells everybody to evacuate to the mall. Chris, Sam, Mike, Ashley, Harlan, Wade and many other townspeople all escape and barricade themselves in the mall (but Wade flees into the mines and locks the gate before the attack) and defend themselves from the spiders. Meanwhile, Harlan and Chris climb onto the roof and ascend the radio mast and try to get a signal to call the army as they are being attacked by the spiders, but are believed to be pranksters. Harlan jumps from the roof, after the tarantula breaks open the gates and lets the spiders enter the mall, and lands in some bushes, where he meets up with Pete. The two run from spiders as Chris meets up with the remaining townsfolk and goes down to the basement. Meanwhile Bret, still wandering the mines, gets a good peek at Consuela during her feeding and encounters the cowardly Wade before his abduction.
While the townsfolk are in the basement, Bret arrives on a forklift that brings down the locked gate, and they all head to through the mines straight to the front entrance, discovering the methane-filled tunnels. After losing Norman and freeing Wade, Chris goes to look for his Aunt Gladys in the mines and finds her and the gold his father was searching for, but is confronted by the gigantic Consuela. He uses perfume to distract the spider and the escapes using Bret's motorcycle. Chris then blows up the spiders and the mines utilizing Gladys's smoking addiction and the high concentrations of [[[Wikipedia:Methane gas|methane gas]]. The police finally arrive. They had not believed the reports of the spiders but believed Harland's theory that the assailants were extraterrestrial in nature, until Chris tells them that the assailants were "just spiders, that had ingested extremely high levels of toxic waste."
As the story ends, Harlan is heard making a radio report about the spiders. He concludes that the town has decided to cover up the whole incident, but have let Harlan continue broadcasting the incident, knowing nobody will believe him. He also mentions Chris reopening the gold mines and putting everyone back to work, but tells us "that is another story altogether." As the camera zooms in close on his mouth, it is clear that he now has three gold teeth.
Director Ellory Elkayem got the idea from his 1997 short film, Larger than Life, which also handled a spider-fighting storyline.
The film was originally titled Arach Attack or Arac Attack (under which it was released in Europe and other countries around the world) but the similarity to 'Iraq Attack' made the title seem inappropriate near the start of the Iraq War.
The title Eight Legged Freaks is a line that Arquette ad-libbed in the movie: "Get back, you eight-legged freaks!" The title however contains a punctuation error in that it drops the hyphen, changing both the meaning ("eight freaks with legs" instead of "freaks with eight legs") and the pronunciation ("legged" as one syllable instead of two).
- The town of Prosperity does not exist in Arizona. The scenes inside Prosperity Mall were actually shot in an abandoned mall in Glendale, Arizona. The location was formerly Valley West Mall and also known as Manistee Mall. This movie would be the last operation that took place in the mall, as it was demolished soon after shooting was completed.
- The scenes in Aunt Gladys's house in the kitchen and in Gladys' basement were filmed at the Manistee Ranch in Glendale, Arizona.
- The alternate beginning is an extended version in which Harlan does a broadcast promoting the mall, after which a worker at the mall sees Wade having the toxic waste put in the basement.
- In the alternate ending, after the mines are blown up, the townsfolk walk down a road to get help. They meet up with Pete and Harlan who were walking through the desert, Pete trying to convince Harlan the spiders were not aliens. Afterward, Sam and Chris kiss as the scene ends.