In a Californian forest, a group of alien botanists land in a spacecraft, collecting flora samples. When government agents appear on the scene, they flee in their spaceship, leaving one of their own behind in their haste. At a suburban home, a ten-year-old fatherless boy named Elliot, is trying to spend time with his brother, Michael, and his friends. As he returns from picking up a pizza, he discovers that something is hiding in their tool shed. The creature promptly flees upon being discovered. Despite his family's disbelief, Elliot leaves Reese's Pieces candy to lure the creature to his bedroom. Before he goes to sleep, he realizes it is imitating his movements. He feigns illness the next morning to stay home from school and play with it. Later that day, Michael and their five-year-old sister, Gertie, meet it. They decide to keep it hidden from their mother, Mary. When they ask it about its origin, it levitates several balls to represent its solar system and then demonstrates its powers by reviving a dead chrysanthemum.
At school the next day, Elliot begins to experience a psychic connection with the alien, including exhibiting signs of intoxication (because it is at his home, drinking beer), and he begins freeing all the frogs in his biology class. As the alien watches John Wayne hug Maureen O'Hara in The Quiet Man on TV, Elliot hugs a girl he likes. He is then sent to the principal's office.
The alien learns to speak English by repeating what Gertie says as she watches Sesame Street and, at Elliot's urging, dubs itself "E.T." He reads a comic strip where Buck Rogers, stranded, calls for help by building a makeshift communication device and is inspired to try it himself. E.T. receives Elliot's help in building a device to "phone home" by using a Speak & Spell toy. Michael notices that his health is declining and that Elliot is referring to himself as "we."
On Halloween, Michael and Elliot dress E.T. as a ghost so they can sneak him out of the house. Elliot and E.T. ride the former's bike to the forest, where E.T. makes a successful call home. The next morning, Elliot wakes up in the field, only to find E.T. gone, so he returns home to his distressed family. Michael searches for and finds E.T. dying next to a culvert, being investigated by a raccoon. Michael takes him home to Elliot, who is also dying. Mary becomes frightened when she discovers her son's illness and the dying E.T., just as government agents invade the house. Scientists set up a medical facility there, quarantining Elliot and E.T. Their link disappears and E.T. then appears to die while Elliot recovers. A grief-stricken Elliot is left alone with the motionless E.T. when he notices a dead chrysanthemum, the plant E.T. had previously revived, coming back to life. E.T. reanimates and reveals that his people are returning. Elliot and Michael steal a van that E.T. had been loaded into and a chase ensues, with Steve's friends joining them as they attempt to evade the authorities by bike. Suddenly facing a police roadblock, 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, as she presents him with the chrysanthemum that he had revived. Before boarding the spaceship, he tells Elliot "I'll be right here," pointing his glowing finger to his forehead. He then picks up the chrysanthemum, boards the spaceship, and it takes off, leaving a rainbow in the sky as everyone watches it leave.
Output: Why does Elliot hug the girl he likes at school?