In Boston, the eight-year old lonely boy John Bennett has no friends. On the Christmas day, he wishes that his Ted bear comes to life and a miracle happens and Ted becomes his only friend. Twenty-seven years later, John Bennett is a pothead that works at a car rental and spends his idle time smoking pot and watching movies with Ted. He also has a girlfriend for four years, Lori Collins, who has a great job. Lori's boss Rex tries unsuccessfully to get into her pants. One day, John meets the weird Donny that worships Ted and wants to buy him for his son Robert but John refuses the offer. When Lori puts John against the wall to stay with her, John has to make a tough decision.