The fully nonlinear governing equations for spin-1/2 quantum plasmas are presented. Starting from the Pauli equation, the relevant plasma equations are derived, and it is shown that nontrivial quantum spin couplings arise, enabling studies of the combined collective and spin dynamics. The linear response of the quantum plasma in an electron-ion system is obtained and analyzed. Applications of the theory to solid state and astrophysical systems as well as dusty plasmas are pointed out.