In the fictional town of Lillian, Ohio, early 1979, a factory worker at the local steel mill changes the number of days since the last accident from 784 days to 1 day. Joe Lamb (Joel Courtney), a 13-year-old boy living in town lost his mother, who had died in the accident referred in the beginning at the mill. Joe sits on a swing set, after the funeral, holding his mother's locket which contains a picture of her holding him as an infant. Louis Dainard (Ron Eldard) drives up to Joe's house disheveled as he makes his way up the driveway, looking Joe in the eye just before entering the house. After a brief moment, the sound of yelling and dishes breaking are heard from within. The front door slams open with Joe's father shoving Dainard down the steps in handcuffs. Placing Dainard in the back seat of his patrol vehicle, Joe's father pauses to look at his son. Visibly upset, he tells Joe to stay put and he will return later. Later in the movie Alice, Dainard's daughter,(Elle Fanning), reveals that her father, an alcoholic, had been drinking the morning of the accident. Since Joe's mother was a kind woman, willing to see the best in everyone and didn't want Louis to be fired, she stayed to cover his shift that day. Unfortunately, doing so resulted in her being fatally crushed by a steel beam.
Four months later, as summer break begins, Alice, even though she has no driver's license, uses her father's car to take Joe and his friends Charles (Riley Griffiths), Preston (Zach Mills), Martin (Gabriel Basso), and Carey (Ryan Lee) to an old train depot. The group is shooting a scene there for Charles' low budget zombie movie on Super 8 film. During the shoot, Joe witnesses a pick-up truck drive onto the tracks towards an oncoming train, which causes a massive derailment. Recovering from the accident, the kids find the wreck littered with strange silver cubes. The kids approach the truck and discover Dr. Woodward (Glynn Turman), their biology teacher, behind the wheel of the truck. He instructs them to never talk about what they saw - otherwise they and their parents will be killed.
Soon, the U.S. Air Force arrives to secure the crash site while the kids flee. However, the commanding officer, Colonel Nelec (Noah Emmerich), finds one of the used Super 8 film boxes that the kids left behind and suspects that Dr. Woodward had someone there to film the derailment. Later Nelec, who seems to know Dr. Woodward, questions him about his research about the creature. When Woodward refuses to cooperate, Nelec has him killed by lethal injection.
Joe and Charles reviews some of their clips they captured on the night and discover that there was something inhuman escaping from the derailed train.
After days of strange phenomena (pets running away, kitchen appliances, car engines, and power lines disappearing; people being abducted), the Air Force commences "Operation Walking Distance" and deliberately starts a wildfire outside of town. This gives them a pretense to evacuate the entire town to the local Air Force base. At the base, Joe runs into Louis, who tells him that a creature abducted his daughter, Alice.
The kids convince the film store clerk, as part of a deal to introduce him to Charles' sister, to drive them back to their school. They break into Woodward's stash of confiscated items, thinking he may have hidden in the stash documentation about his research and clues about the creature that might help them save Alice. In the papers, film, and audio recordings they find, they discover that the government imprisoned an extraterrestrial that crashed on Earth in 1958. The alien only wished to rebuild its ship and return home, but was instead imprisoned and tortured by the Air Force in order to learn from the creature's advanced technology and intellect. One film shows Woodward, a researcher at the time, being attacked by the alien. This physical contact caused him to form a telepathic bond with the creature, through which he learned that the creature only wanted to go home and that everyone would pay dearly for keeping the creature captive and torturing it. By colliding with the train, he hoped to free the creature.
Joe's father, Jackson (Kyle Chandler) makes his way to the air base frustrated by the lack of answers he's receiving about the unexplained incidents in his town. He arrives expecting to meet with Nelec, but is placed under military arrest. While imprisoned, he subdues one of the airmen. Putting on the airman's uniform, and later firing at a propane truck to create a distraction, he slips away from the base and heads to the evacuation site.
Colonel Nelec and his men storm the school and capture Joe, Carey, Charles, and Martin as they work their way through Woodward's stash of files. Upon searching the youngsters, one of the men takes the locket containing the photo of Joe's mother. The airmen, including Nelec, place the children on a security bus and head back to the Air Force base. On the way, the creature attacks them and flips the bus on its side. Nelec's men are killed while Joe and his friends escape by breaking through the vehicle's glass windows. The creature kills Nelec after a brief stand-off, biting his head off. After the carnage is over, Joe recovers his mother's locket from the body of the airman who took it, once again finding solace in the sense of safety it provides him.
The kids head through the town, which is now under heavy fire as the military battles the creature. They enter one of the abandoned houses and are hit by an explosion which leaves Martin injured. Charles stays behind to look after Martin while Joe and Carey go on to save Alice.
Joe finds the creature's subterranean lair near the cemetery where his mother is buried, along with dozens of missing people who have been trapped there by the creature. In the lair they discover that the creature was using the town's missing electronics to create a large magnet, using the town's water tower as the magnet itself. Joe manages to rescue Alice by having Carey use his fireworks as a distraction. They also rescue the town's sheriff and another woman, who had previously been reported missing. As they make their escape, the creature recaptures the sheriff and the woman.
When the creature grabs Joe, he tells the creature: "Bad things happen, and it's no one's fault…I'm sorry." The creature, due to its telepathic ability through touch, understands and lets go of Joe, allowing him and his friends to escape. Shortly after, all the missing metal reappears, as a ship begins to take form around the town's water tower. Joe's necklace, left by his mother as a keepsake to him after her death, is also sucked upwards and, after a moment, he decides to let it go. The movie ends with the star ship blasting off towards the creature's home planet while Joe and Alice hold hands.
While the end credits play, the movie that Charles and his friends were working on (The Case) is shown.
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