"It's not funny. If you must know, when I was three, Fred turned my - my teddy bear into a great big filthy spider because I broke his toy broomstick ... You wouldn't like them either if you'd been holding your bear and suddenly it had too many legs and ... "
-- Ron Weasley
He does it because Ron broke his toy broomstick. From that point on, Ron is deathly afraid of spiders.
This is a pretty complex bit of Transfiguration for a five-year-old, considering eleven-year-olds struggle to turn matches into needles. Maybe Ron just dreamed the whole thing.