Arachne

"You have no idea how much hatred boils beneath us. The spiteful thoughts of so many monsters trying to reach the Athena Parthenos and destroy it. My webbing is the only thing holding the room together, girl! One false step, and you’ll fall all the way to Tartarus—and believe me, unlike the Doors of Death, this would be a one-way trip, a very hard fall! I will not have you dying before you tell me your plan for my artwork."

- Arachne to Annabeth

Arachne was a great mortal weaver. She once challenged Athena to a contest to see who really was the best weaver. She was turned into a spider by Athena because her tapestry was a great insult to the gods. Arachne's name simply means "spider" in Greek.

History
Arachne was the daughter of Idmon of Colophon, who was a famous wool dyer in Tyrian purple. She was a fine weaver in Hypaepa of Lydia. She was as skillful as the finest artist of the day and much praise was given to her in Hypaepa, where she had her workshop.

This all went to her head and eventually Arachne became so conceited of her skill as a weaver that she began claiming that her skill was greater than that of Athena's, the goddess of wisdom, war, arts, and weaving. Athena was outraged, but gave Arachne a chance to redeem herself. Assuming the form of an old woman, she warned Arachne not to offend the gods. She told Arachne to kneel down and beg for the gods mercy. Arachne scoffed and wished for a weaving contest, so she could prove her skill. Athena dropped her disguise and the contest began.

Athena wove the scene of her victory over Poseidon that had inspired the people of Athens to name their city for her. According to Ovid's Latin narrative, Arachne's tapestry featured twenty-one episodes of the infidelity of the gods, disguised as animals. For example: Zeus being unfaithful with Leda, with Europa, and with Danaë, among others.

Even Athena admitted that Arachne's work was immaculate. Athena did win the contest, but she was so outraged that Arachne had disrespected the gods with the images in her tapestry, she turned Arachne into a spider. Some versions of the stories say that in fact Athena attacked Arachne, forcing her to hang herself in protest. In response, Athena covered Arachne in Helsbane, and allowing her to weave forever.

In the Series
Some time after the Romans brought the Athena Parthenos back to Rome, they brought it underground in a secret area. Arachne eventually made her lair here and wrapped the statue in her silk in order to contain and hide it's magical properties. For centuries, children of Athena would venture to this place using the Mark of Athena, but all were killed by Arachne's traps. Otis and Ephialtes would also help Arachne, collecting trophies from those they killed while helping Arachne.

The Lightning Thief
While Arachne is never seen, it is shown several times that children of Athena have a fear of Arachne's children, spiders (arachnophobia). Annabeth is so scared of spiders that she even has problems with anything that looks like them. When Ares sends Percy, Annabeth, and Grover to Waterland, they were attacked by tiny mechanical spiders that were made by Hephaestus. Later, when Annabeth is so entranced by a Sim City type game in The Lotus Hotel and Casino, Percy has to say the word "spider" to snap her out of her trance.

The Mark of Athena
Arachne appears as the final obstacle in Annabeth's way as she follows the Mark of Athena to the Athena Parthenos. The statue is kept in Arachne's chamber, which is covered with spiderwebs and Arachne's own woven tapestries. Arachne's tapestries, according to Annabeth, are the most beautiful she's ever seen (one of them depicts Percy and Annabeth's first underwater kiss, as if she'd been there watching them). Arachne is seen to be in collaboration with Ephialtes and Otis, who seem to fear her despite being immortal giants.

When Annabeth arrives in Arachne's chamber, the spider woman initially plans on eating her. Arachne tells Annabeth that she was a far better weaver then Athena and shows Annabeth her tapestries. Annabeth knows that she can not defeat Arachne in combat so she uses Arachne's pride against her, luring her mother's nemesis into the idea that Annabeth, as Chief Architect of Olympus, could arrange for Arachne's work to be displayed on Mount Olympus, even in the Hall of the Gods itself. Annabeth tells Arachne that she is no longer on her mother's side since her mother's roman form practically disowned her. Temptingly accepting the offer, Arachne agrees. However, she adds that Arachne will have to prove herself with a weaving challenge, and tricks Arachne into weaving monster-sized Chinese handcuffs. Claiming she spots a flaw inside, Annabeth tricks Arachne into entering the Chinese handcuffs, whereupon Arachne is trapped. Afterwards, she is tricked into admitting that she'd have killed Annabeth anyway.

However, after Annabeth taunts Arachne with the knowledge that the Athena Parthenos will be restored to Mount Olympus, and that Arachne has inadvertently helped Athena, Arachne becomes outraged and threatens Annabeth, the monster begins to bring down the entire chamber, opening a pit directly to Tartarus. Though Arachne falls down into the eternal darkness, she manages to ensnare Annabeth and drag her along to the edge of the pit. Percy grabs hold of Annabeth, but knows their friends will never be able to save them, and he himself cannot sever Arachne's silk, which is still bound around Annabeth's ankle. Percy tells Nico di Angelo to come and meet them at the Doors of Death, Percy lets go, and he and Annabeth fall with Arachne into Tartarus.

Trivia

 * Arachne and Annabeth share the same fatal flaw, hubris.