In 1977, Voyager 2 was launched containing a gold, phonographic disk with messages of peace embedded within it and inviting visitors to come to the planet Earth. The Voyager probe is intercepted by an alien space ship which sends a small observational scout vessel in response to the invitation in order to establish first contact with Earth. However, instead of being greeted by its human hosts, the spacecraft is promptly shot down by the US government. The ship crashes in Chequamegon Bay, Wisconsin and the alien, a blue ball of energy, emerges from the wreckage. It stumbles upon the house of recently widowed Jenny Hayden (Karen Allen
). There, it finds a lock of hair belonging to deceased Scott Hayden in a photo album and uses it to clone a new body in the likeness of Scott, which the stunned Jenny witnesses.
The Starman (Jeff Bridges
) is seen to possess seven small silver spheres which he turns into pure energy to perform miraculous feats. He uses the first one to send a message to his people that his craft has been destroyed, that the environment is hostile, and that he will rendezvous with them at "Landing Area One" in three days, located in Arizona. He then uses the second one to create a holographic map of the United States in order to compel the dumbstruck Jenny to help him get to Arizona. However, Jenny is frightened of the Starman and reacts with hostility towards him, doing what she can to avoid traveling with him. After repeatedly and unsuccessfully attempting to escape, she finally implores the Starman to shoot her with her pistol. Instead, the Starman releases the pistol's magazine and tells her he means her no harm. As they continue on their journey the Starman, who developed a rough understanding of English syntax from the Voyager 2 disk, learns to communicate exactly who he is and what his purpose is to Jenny while she tries to teach the Starman that humanity is not completely savage.
The Starman explains to Jenny that he has three days to get to the rendezvous point, Arizona's Barringer Crater, or he will die. She teaches him how to drive a car and use credit cards, intending to leave him self sufficient enough to continue the journey alone. However, while they are stopped at a small diner, they connect on a more emotional level with Jenny attempting to explain to him what love is. She also witnesses the Starman revive a dead deer that had been tied to the front of a hunter's (Ted White
) car. Deeply moved, she resolves to help him.
Meanwhile, the US army, after discovering the crash site of the Starman's ship, is tracking the couple's trail to Arizona. The army battilion is led by the cold-blooded NSA Chief George Fox (Richard Jaeckel
) who is reluctantly assisted by SETI scientist, Mark Shermin (Charles Martin Smith
). Shermin is clearly a more understanding and empathic man and, after he finds the Voyager 2 disk in the Starman's ship, Shermin deduces that the Starman was invited to Earth peacefully and discovers that the alien has taken the form of Scott Hayden through collected pieces of evidence around Jenny's house.
Once news of the fugitives becomes publicized, a couple of cops (Dirk Blocker
, M.C. Gainey
) intent on becoming local heroes, discover Jenny and Starman residing at a motel. They decide to hold position outside until the government arrives but, when Jenny and Starman attempt to escape, despite employing a distraction, the cops pursue them by car and one shoots Jenny. Starman crashes their vehicle into an overturned gas tanker, protecting himself and Jenny from the ensuing explosion with one of his spheres. Under cover of the chaos, he seeks refuge in a mobile home being transported on a trailer bed.
Jenny never regains consciousness but Starman, down to his last two spheres, uses one to revive her, gently kissing her as her wounds heal. He then leaves her and attempts to reach the Crater alone; afraid she will be hurt again. Jenny regains consciousness and heads off to find him, aware that they were being pursued by the government. Meanwhile, the Starman hitches a ride with a local truck driver, telling him that his name is Scott and he's headed for Arizona. A large traffic jam awaits them. Several miles back, Jenny manages to hitch a ride with another truck diver and, after a while, are met by the same traffic jam. Police have barricaded the road and are interrogating people. When she locates Starman standing anonymously within the crowd, and knowing it's only a matter of time before he's revealed, Jenny employs the truck driver to stage a distraction for her. He explodes a gas can which incites the police to chase after him, enabling Jenny to reach Starman. They escape in the panic and continue their journey, stowing away on a train boxcar.
En route, they become close and consumate their feelings for one another. Starman tells Jenny that he gave her a baby, despite Jenny's insistence that she is infertile. Starman assures her to believe what he says and tells her that the child will be the son of her husband, since he is a clone of Scott. He explains that the child will know all that Starman knows and will grow up to be a teacher. However, he gives her the option of taking it back but Jenny refuses, joyfully accepting his gift.
The couple mistakenly travel too far on the train and arrive in Las Vegas and, to make matters worse, Jenny has lost her wallet. The Starman uses their last quarters in a slot machine which he manipulates with his powers in order to win a $50,000 jackpot. The couple use their winnings to buy a new car to complete the drive to Winslow, Arizona, which is near Barringer Crater.
Meanwhile, Fox has received information from NORAD that the trajectory of The Starman's Observation Craft, prior to it being shot down, was to Barringer Crater, and concludes that the Starman, along with Jenny Hayden would be in that general vicinity within the next 24 hours of that determination.
Near the end of the journey, the Starman, growing weaker, and Jenny are confronted in a cafe in Winslow, where Mark Shermin interviews the dying Starman. The Starman explains to him that his people had previously visited Earth and are interested in humans because, out of all the many savage intelligent races in the universe, humans are at their best when things are at their worst. Confronted with this, Shermin decides to ruin his career to help the Starman and Jenny escape.
The couple reach the crater as Army helicopters buzz them. Suddenly, the aliens' large, spherical mothership appears in the sky and descends into the crater. A blue light surround the couple and the Starman is instantly restored to health. He tells Jenny he will never see her again. Jenny confesses her love and begs him to take her with him but he says she would die on his world. He then gives her his last silver sphere, telling her that her son will know what to do with it before asking Jenny to tell her son about him. He asks her to tell him how to say goodbye and they kiss one last time before the Starman walks away into the beam. As Jenny watches in silence, the mothership rises, carrying the Starman away.