The film opens in a Northern California forest as a group of alien botanists collect flora samples. U.S. government agents appear and the aliens flee in their spaceship, leaving one of their own behind in their haste. The scene shifts to a suburban California home, where a boy named Elliott plays servant to his older brother, Michael, and his friends. As he fetches pizza, Elliott discovers the stranded alien, who promptly flees. Despite his family’s disbelief, Elliott leaves Reese’s Pieces candy in the forest to lure it into his bedroom. Before he goes to bed, Elliott notices the alien imitating his movements.
Elliott feigns illness the next morning to avoid school so he can play with the alien. That afternoon, Michael and their younger sister, Gertie, meet the alien. Their mother, Mary, hears the noise and comes upstairs. Michael, Gertie, and the alien hide in the closet while Elliott assures his mother that everything is all right. Michael and Gertie promise to keep the alien a secret from their mother. Deciding to keep the alien, the children begin to ask it about its origin. It answers by levitating balls to represent its solar system, and further demonstrates its powers by reviving a dead plant.
At school the next day, Elliott begins to experience a psychic connection with the alien. Elliott becomes irrational due partly to the alien’s intoxication from drinking beer. Elliott then begins freeing all the frogs from a dissection class. As the alien watches John Wayne kiss Maureen O’Hara in The Quiet Man, Elliott’s psychic link causes him to kiss a girl he likes in the same manner.
Makeshift communicator used by E.T. to phone homeThe alien learns to speak English by repeating what Gertie says as she watches Sesame Street and, at Elliott’s urging, dubs itself “E.T.” It enlists Elliott’s help in building a device to “phone home” by using a Speak & Spell toy. Michael starts to notice that E.T.’s health is declining and that Elliott is referring to himself as “we”. On Halloween, Michael and Elliott dress E.T. as a ghost so they can sneak him out of the house. Elliott and E.T. ride a bicycle to the forest, where E.T. makes a successful call home. The next morning, Elliott wakes up to find E.T. gone, and returns home to his distressed family. Michael finds E.T. dying in the forest, and takes the alien to Elliott, who is also dying. Mary becomes frightened when she discovers her son’s illness and the dying alien, before government agents invade the house.
Scientists set up a medical facility in the house, quarantining Elliott and E.T. Their link disappears (presumably severed by E.T. to save Elliott’s life), and E.T. then appears to die while Elliott recovers. Elliott is left alone with the motionless alien when he notices a dead flower, the plant E.T. had previously revived, coming back to life. E.T. reanimates and reveals that his people are returning. Elliott and Michael steal a van that E.T. had been loaded into and a chase ensues, with Michael’s friends joining them as they attempt to evade the authorities by bicycle. Suddenly facing a dead end, they escape as E.T. uses telekinesis to lift them into the air and toward the forest. Standing near the spaceship, E.T.’s heart glows as he prepares to return home. Mary, Gertie, and “Keys”, a government agent, show up. E.T. says goodbye to Michael and Gertie, and before entering the spaceship, tells Elliott “I’ll be right here”, pointing his glowing finger to Elliott’s head. E.T. then picks up the flower pot Gertie gave him, walks into the spaceship, and takes off, leaving a rainbow in the sky. The last shot of the movie is Elliot looking up at the sky.