In 1985, eight-year-old John Bennett is a friendless only child living in Norwood, Massachusetts, a suburb of Boston, who wished for his new Christmas gift, a jumbo teddy bear named Ted, to come to life and become his best friend. The wish coincides with a shooting star and comes true; word spreads and Ted was briefly a celebrity.
27 years later, John (now 35) and Ted are still living in Boston, and are still staunch companions enjoying a hedonistic life. John is dating Lori Collins whom he met at a dance club. As their fourth anniversary approaches, Lori hopes to marry John, but feels he can not move forward in life with Ted around. John is hesitant about making Ted leave, but he is persuaded to act when they find Ted at home with a group of prostitutes after their anniversary dinner.
John finds Ted his own apartment and a job at a grocery store, where Ted begins dating his co-worker Tami-Lynn. Lori learns that John has been skipping work, using her as an excuse, to reluctantly continue to spend most of his time with Ted. John and Lori are invited to a party put on by Lori's womanizing manager Rex, but Ted lures John away to a party at his apartment with the pressured offer to meet Sam J. Jones, the star of their favorite film, Flash Gordon. John intends to stay only a few minutes, but gets caught up in the occasion. Lori finds John there and furiously breaks up with him. A devastated John angrily blames Ted for ruining his life and disowns him.
John and Ted confront each other about their ruined friendship and then fight, but manage to reconcile after a violent brawl in John's hotel room (John is crushed by a television). To repair John's relationship with Lori, Ted arranges for an old lover, singer Norah Jones, to help by having John express his love for Lori with a song during her concert that Lori and Rex attend. He does an off-key rendition of the Octopussy theme song, All Time High, by Rita Coolidge and is booed offstage. Lori is touched by the attempt and returns to her apartment, where Ted confesses to his role in John's relapse and offers to leave them alone forever if she talks to John.
Lori is persuaded, but Ted is kidnapped by Donny, a mentally unstable stalker who idolized Ted as a child. Donny plans to make Ted his brutish son Robert's new toy. Ted manages to reach a phone to contact John, but is immediately recaptured by Donny and Robert. Realizing that Ted is in danger, John and Lori locate Donny's residence and track him to rescue Ted. The chase leads to Fenway Park, where John punches Robert, knocking him out, but during the chase, Ted is damaged and falls onto the field, ripped entirely in half. A police car arrives, forcing Donny to flee. John and Lori gather Ted's stuffing and Ted relays his wish that John be happy with Lori, before the magic in Ted fades away making him a normal teddy bear again.
Not wanting to lose Ted, a distraught John and Lori rush back to her apartment and attempt to repair Ted, which proves useless. Feeling saddened about her part in the incident, Lori makes a wish on a shooting star while John is asleep. The next morning, Ted is revived as a result of the wish and reunites with John and Lori, encouraging them to resume their relationship. John then finally proposes to Lori and she accepts. Sometime later John and Lori are married (with Sam Jones as the presiding minister), and Ted comfortably accepts having a life of his own, as he and Tami-Lynn continued their love affair. Sam Jones attempts to restart his career and moves into a studio apartment with Brandon Routh. Rex gives up his pursuit of Lori, goes into a deep depression, and dies of Lou Gehrig's disease. Donny gets arrested by the Boston Police Department for kidnapping Ted, but the charges are dropped due to the stupidity of the situation. Robert hires a personal trainer, loses a significant amount of weight, and goes on to become Taylor Lautner.
Mark Wahlberg as John Bennett, Ted's best friend who as a child wished he would come to life. An immature but mild-mannered slacker in his 30s who loves to smoke pot with his best friend.
Colton Shires as teenage John Bennett
Bretton Manley as young John Bennett
Seth MacFarlane as Ted Clubberlang (voice and motion capture), John's teddy bear and best friend. John wished him to life when he was a kid and the two have remained friends ever since. Ted grows up to be a crude, foul-mouthed, alcoholic teddy bear but he is also a lovable cheeky-chappy and is highly protective of John.
Zane Cowans as young Ted Clubberlang's voice.[3][full citation needed]
Tara Strong (uncredited) as Ted Clubberlang's "I Love You" function[3]
Mila Kunis as Lori Collins, John's girlfriend
Joel McHale as Rex, Lori's manager and John's nemesis
Giovanni Ribisi as Donny, Ted's biggest fan and stalker
Aedin Mincks as Robert, Donny's son
Patrick Warburton as Guy, John's co-worker
Laura Vandervoort as Tanya, John's co-worker
Matt Walsh as Thomas Murphy, John's boss
Jessica Barth as Tami-Lynn McCafferty, Ted's girlfriend and co-worker
Bill Smitrovich as Frank Stevens, Ted's boss
Alex Borstein as Helen Bennett, John's mother
Ralph Garman as Steve Bennett, John's father
Jessica Stroup as Tracy, Lori's co-worker
Sam J. Jones as himself
Ryan Reynolds (uncredited) as Jared, Guy's boyfriend
Norah Jones as herself
Tom Skerritt as himself
Mike Henry as a Southern newscaster
Robert Wu as Quan Ming/Ming the Merciless
Ted Danson (uncredited) as himself
Patrick Stewart as Narrator