John Bennett, a lonely child, wished for his teddy bear named Ted to come to life. Now, as an adult, he must decide whether to keep his lifelong companion or prioritize his relationship with his girlfriend, Lori.

Newlywed couple Ted and Tami-Lynn are struggling financially and decide to have a baby. However, Ted must first prove that he is a person in a court of law. With the help of his friend John and a young lawyer named Samantha, they navigate the legal system and fight for Ted's recognition as a person. Along the way, they encounter various obstacles, including a powerful toy company executive who wants to exploit Ted. Through their determination and friendship, they ultimately succeed in their quest, and Ted and Tami-Lynn adopt a child named Apollo Creed Clubberlang.