Alien botanists are collecting plant specimens in a California forest at night, one of them wandering too far. U.S. government vehicles arrive, and the ET flees, but the alien ship takes off, leaving him behind. Later, in the nearby San Fernando Valley, ten-year-old Elliott Taylor (Henry Thomas) is bouncing a ball around in his backyard, when it flies into a toolshed and flies back out again. Later, he returns with a flashlight and startles the creature among the cornstalks.

His family chalks this up to Elliott’s over-developed imagination, but he returns and leaves a trail of Reese’s Pieces to lure it into the house. He hides it in his room and pretends to be sick so he can stay home from school. He learns that he and ET are psychically linked, feeling each other’s emotions. He introduces ET to his older brother Michael (Robert MacNaughton) and his little sister Gertie (Drew Barrymore). They keep the alien secret from their divorced mother Mary (Dee Wallace).

The children ask ET about his homeworld and he levitates a handful of balls to represent the planets. When Elliott’s finger is cut, ET cures the wound with a touch. The next day, Elliott has to go to school, but ET stays home drinking beer and watching TV. What he sees on TV Elliott does at school, including setting free the frogs in biology class and kissing a pretty girl. He ends up in the principal’s office. After reading a Buck Rogers comic strip, ET is inspired to build a communication device out of a phone, a Speak and Spell toy. and various bits of junk. The government is spying on their house. On Halloween Night, the kids dress ET as a ghost by putting a sheet over his head, so he can see the children in their costumes. ET and Elliott manage to phone ET’s ship in the forest.

The next day, Michael finds ET dying near a culvert and takes him home to find that Elliott is also dying. Government agents in hazmat suits invade the house. Their leader is recognizable by his jingling keys (Peter Coyote). The scientists set up a lab in the house. When Elliott recovers, ET seems to die. But Elliott notices a dead flower blooming again and realizes ET’s family is coming for him. Elliott and Michael steal a government van and a strange chase occurs in the suburbs, with Michael’s gang on bicycles evading the authorities. ET, riding in Elliott’s bicycle basket, levitates over a roadblock and flies into the forest. Mary, Gertie, and a reformed Keys show up as the alien visitors return for ET. The ship takes off leaving a rainbow behind. By this time, the audience is in tears, and no-one scoffs at the rainbow.

It should come as no surprise that the whole story is based on Steven Spielberg’s childhood imaginary friend. Filming Raiders of the Lost Ark in Tunisia made him homesick, and he abandoned other projects to make this little, personal film. Spielberg convinced Sid Sheinberg of Universal Studios to buy ET’s script from Columbia Pictures for a million dollars, but Columbia wanted five per cent of the net profits, which turned out to be a pretty good move. ET’s face, with animatronics by Carlo Rimaldi, was inspired by Carl Sandburg, Albert Einstein, and Ernest Hemingway, with soulful glass eyes that sold the puppet. The costume was worn for some scenes by two little people (Tamara De Treaux and Pat Bilon), as well as 12-year-old Matthew DeMeritt, born without legs, who often played ET walking on his hands.

Hershey’s okayed the use of Reese’s Pieces when M and M thought kids would be scared by ET. As usual, Spielberg was brilliant with the child actors. ET’s voice was created by heavy smoker Pat Walsh and 16 other people including Spielberg himself, Debra Winger, Spielberg’s film professor, raccoons, otters, and horses. Real doctors from the USC Medical Center treated the ailing ET. Filming was done in chronological order for the young actors, and the puppeteers were kept away from them. Robert Zemeckis suggested the brilliant scene with ET hiding from Elliott’s Mom among the stuffed toys. John Williams did the music, and the chase scene was filmed to match the score.

Most of the film was shot at the eye-level of a child. On Halloween, ET seems to recognize Yoda, and in Star Wars: The Phantom Menace, ET’s species can be seen in the Galactic Senate. John Williams won the 1982 Oscar for Best Original Score largely because Spielberg edited much of the film to match the music. At the auditions, Henry Thomas made himself cry thinking about the day his dog died, bringing Spielberg to tears himself and getting the job. ET’s communicator, built by scientist Henry Feinberg, actually worked. Neil Diamond was inspired by the film to write “Heartlight”. The girl Elliott kisses, Erika Elniak, and Drew Barrymore both appeared in Playboy, much later.

An Indian director named Satyajit Ray claimed that the film was similar to a script of his circulating in Hollywood but declined to sue because he admired Spielberg’s work. The film has been called a mash of Spielberg’s childhood, Peter Pan, The Wizard of Oz, and Jesus Christ. The suburbia it portrays is not idealized but is rather dark. The film was a tremendous hit among audiences and critics, and Hershey’s profits increased 65%. It was nominated for nine Oscars, and won four of them, but was beaten out of Best Picture by Gandhi. It won a best picture Golden Globe and much more. Spielberg got a Peace Medal from the U.N. It beat out Star Wars for highest grossing movie ever and held that status until Jurassic Park came along.