At the tower's entrance Dante encounters Cerberus, defeats him and claims the monster's soul, which transforms into a new weapon. In what becomes a recurring game mechanic, the souls of some defeated boss monsters are transformed into new weapons for Dante's arsenal. Dante is then attacked by a woman on a motorcycle, whose name later becomes Lady. It is revealed in subsequent cutscenes that Arkham is working for Vergil and they plan to take Dante's half of the amulet their mother gave them, and use its power to reactivate the tower's ability to connect the human and demon worlds. It is also revealed that Arkham is Lady's father, that he murdered her mother, and that she is pursuing him to seek revenge and to uphold her family's honor.

After numerous battles, an encounter with a being calling itself Jester, and another run-in with Lady, Dante attains the tower's summit and battles Vergil. Vergil soundly defeats Dante, steals his amulet, and departs. Dante's dormant devil powers emerge as a result of this setback, and he takes off in pursuit. He eventually catches up in the control room located in the tower's basement, where Vergil is having no luck reactivating the tower. The brothers battle again and seem evenly matched, until they are interrupted first by Lady and then Jester. Jester reveals that he is in fact Arkham, and has been manipulating them all to reactivate the tower. Arkham's plan is to cross over to the demon world and steal the Force Edge, the dormant form of Sparda's original sword which contains the bulk of Sparda's old power, and use it to rule over a demon-infested Earth. The tower then transforms as the spell is broken, carrying Arkham upwards to the summit, while Vergil vanishes in the confusion.

Dante battles his way back up the tower, and eventually fights Lady for the right to pursue Arkham. Dante wins, and Lady lends him her most powerful weapon. Reaching the summit once again, Dante crosses over to the demon world and catches up with Arkham, who has assumed Sparda's demonic form. Overwhelmed by the power, Arkham transforms again into a blob-like creature and battles Dante. Halfway through the fight, as Arkham is gloating that Dante has no chance against his father's power, Vergil reappears and the brothers work together to bring him down. Arkham is thrown out of the demon world in a weakened state and lands atop the tower where Lady kills him. In the demon world, Dante and Vergil battle over ownership of the Force Edge and the amulet halves. Dante is victorious. Vergil decides to stay behind as the portal closes, and vanishes into the darkness with his half of the amulet.

Dante meets Lady outside the tower where she coins the phrase "devil may cry" while trying to comfort him over the loss of his brother. They form a friendship and the beginnings of a partnership in demon-slaying, and he names his shop "Devil May Cry". A scene after the credits reveals Vergil in the demon world, weakened yet determined, as he charges into battle against his father's old foe, Mundus.