In Greek myth, Arachne was a spinstress who wove beautiful tapestries. They were so beautiful, she claimed that she was better than the goddess Pallas Athena. Angered by this, the goddess of wisdom challenged her to a spinning duel.
In some interpretations of the myth, Arachne defeated Athena. In others, Athena proved the superiority of the gods to man, and Arachne hung herself in distress. Whichever the case, Athena changed the poor girl into a spider so that she may weave forever, and because of this myth, all members of the spider family are called arachnids.
"Origin: Greece. A skilled tapestry-weaver in Lydia. She challenged Athena, goddess of weaving, to a contest. Arachne's work was skilled, but her tapestry depicted Zeus's lewd actions. This infuriated Athena, who turned Arachne into a spider woman."
—Shin Megami Tensei A-Mode DDS Dictionary
After being teleported from the Diamond Realm back to Tokyo, the Hero starts to hear the voices of a girl screaming for help on his mind, what causes him intense pain and inflicts damage on his health every Full Moon. After rescuing the Psycho Diver from Ozawa, he explains that the mind of the girl he hears has been possessed by a demon, and because her spirit is interconnected with his own, he feels what she feels. After discovering that she is the leader of the Messian Church established in Shibuya, he goes to save her and, with the help of the Psycho Diver, project his own spirit into the mind of the girl. There, he finds that Arachne is the demon who is possessing the girl's body, and fights her. After Arachne's defeat, the girl reveals herself as the Heroine, and thus leaves the Messian Church to start following the Protagonist wherever he goes for the rest of the game, regardless of alignment.
Arachne appears as the boss of the silver level of the Ueno Mirage instance. Before entering the boss room, players will hear a voice crying out for help. Inside the boss room is Arachne and a large amount of Gyuki minions.