The concept for the film was based on an imaginary friend Spielberg created after his parents' divorce in 1960. In 1980, Spielberg met Mathison and developed a new story from the stalled science fiction/horror film project Night Skies. It was shot from September to December 1981 in California on a budget of US$10.5 million. Unlike most motion pictures, it was shot in roughly chronological order, to facilitate convincing emotional performances from the young cast.
Released by Universal Pictures, the film was a blockbuster, surpassing Star Wars to become the highest-grossing film of all time—a record it held for ten years until Jurassic Park, another Spielberg-directed film, surpassed it in 1993. Critics acclaimed it as a timeless story of friendship, and it ranks as the greatest science fiction film ever made in a Rotten Tomatoes survey. The film was re-released in 1985, and then again in 2002 to celebrate its 20th anniversary, with altered shots and additional scenes.
In a California forest, a group of alien astronauts is collecting flora samples. As one gathers samples and begins to head back to the ship, a car with criminals appears on the scene. The alien tries to flee from them, only to arrive as the ship leaves. The scene shifts to a suburban home, where a 10-year-old boy named Elliott (Henry Thomas) is trying to hang out with his 16-year-old brother Michael (Robert MacNaughton) and his friends. As he returns from picking up a pizza, Elliott discovers that something is hiding in their tool shed. When he tells Michael and his friends, they go to the shed but find nothing. However, after everybody is in bed at night, Elliott sneaks out to investigate, following footsteps into a cornfield, discovering a strange-looking creature. Frightened by each other, both run off screaming. Despite his family's disbelief, Elliott lures the alien from the forest to his bedroom using a trail of Reese's Pieces. Before he goes to sleep, Elliott realizes the alien is imitating his movements. Elliott feigns illness the next morning to stay home from school and play with the alien. Later that day, Michael and their 5-year-old sister Gertie (Drew Barrymore) meet him, and the three decide to keep him hidden from their mother. When they ask it about his origin, the alien levitates several balls to represent the solar system and then demonstrates his powers by reviving a dead geranium.
At school the next day, Elliott begins to experience a psychic connection with the alien, including exhibiting signs of intoxication due to the alien drinking beer, and Elliott begins freeing all the frogs in a biology class that they were about to dissect. As the alien watches John Wayne kisses Maureen O'Hara in The Quiet Man, Elliott kisses a girl he likes.
The alien learns to speak English by repeating what Gertie says as she watches Sesame Street and, at Elliott's urging, dubs himself "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. He gets Elliott's help in building one to "phone home" by using a Speak and Spell toy. Michael notices that E.T.'s health is declining, but Elliot denies this and begins to refer to himself as "we".
On Halloween, Michael and Elliott disguise E.T. as a ghost so they can sneak him out of the house, fooling their mother into thinking the ghost is Gertie. Elliott and E.T. ride the latter's bicycle to the forest, where E.T. makes a successful call home. The next morning, Elliott 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 in a ditch and takes him to Elliott, who is also dying. Their mother becomes frightened when she discovers Elliott's illness and the dying alien, just as government agents invade the house. Scientists set up a medical facility there, quarantining Elliott and E.T. Their link disappears and E.T. then appears to die while Elliott recovers. A grief-stricken Elliott is left alone with the dead E.T. when he notices a dead geranium, 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 the 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 his 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 the latter presents him with the geranium that he had revived. Before entering the spaceship, E.T. tells Elliott "I'll be right here", pointing his glowing finger to Elliott's forehead. He then picks up the geranium Gertie gave him, boards the spaceship before it takes off as Elliott and the rest watch, leaving a rainbow in the sky.
- Henry Thomas as Elliott, a lonely 10-year-old boy. He longs for a good friend, whom he finds in E.T., who was left behind on Earth. He adopts him and they form a mental, physical, and emotional bond.
- Robert MacNaughton as Michael, Elliott's football-playing 16-year-old brother who often makes fun of him.
- Drew Barrymore as Gertie, Elliott's mischievous 5-year-old sister. She is sarcastic and initially terrified of E.T., but grows to love him.
- Dee Wallace as Mary, the children's mother, recently separated from her husband. She is mostly oblivious to E.T.'s presence in her house.
- Peter Coyote as "Keys", a government agent. His face is not shown until the film's second half, his name is never mentioned, and he is identified by the key rings that prominently hang from his belt. He tells Elliott that he has waited to see an alien since age 10.
- K. C. Martel, Sean Frye and C. Thomas Howell as Michael's friends Greg, Steve and Tyler. They help Elliott and E.T. evade the authorities during the film's climax.
- Erika Eleniak as the young girl Elliott kisses in class.
- The trailer can be found in Shrek.