Elmo, Telly, and Rosita wait for the Itsy Bitsy spider to appear on a water spout in the arbor. They all sing "Itsy Bitsy Spider" as they wait. But no Itsy Bitsy! So they think about where bugs are found: near plants, flowers, and in dirt. Maybe he's in the garden? There, Telly observes a bug with six legs, but they find out it's a beetle, not a spider (a spider is not an insect but an arachnid, or a bug with eight legs). They come upon a second bug, but it's another insect—a grasshopper! The grasshopper suggests they check the spider's home.
Rosita spots an anthill, but they find out that ants, not spiders, live in anthills. An ant gives them the clue that a spider lives in a sticky and stringy place, and Elmo realizes that they need to look for a spider web. Telly finds part of a web and follows the string until they reach the Itsy Bitsy Spider, but Itsy Bitsy explains she has important things to do—she's waiting for her egg sac to hatch. Suddenly, it hatches, and Telly, Rosita, and Elmo watch in awe as tiny baby spiders are born!