The movie begins in 1985, when lonely Boston boy John Bennett wishes that the teddy bear he got for Christmas was alive. The wish comes true -- Ted lives! Over the years, Ted becomes a celebrity for a time, before being forgotten. And in the present, John (Mark Wahlberg) and Ted (voiced by Seth MacFarlane; at least the movie has the self-awareness to point out how much Ted sounds like Peter Griffin) are still "thunder buddies," best friends who like to drink, get high, swear (a lot), and throw parties.
But John also has a girlfriend. Lori (Mila Kunis) and John have been dating for four years, and she thinks Ted has been keeping John from growing up and moving on with his career (at a rental car place) and his life. So Ted moves out, getting a job as a cashier (and oddly doing better the more he insults his boss) and dating the white-trash Tami-Lynn (Jessica Barth). But John and Ted keep hanging out, to Lori's exasperation. Then there's Rex (Joe McHale), Lori's boss who keeps hitting on her; and the creepy Donny (Giovanni Ribisi) with his fat son Robert (Aedin Minks), who want to buy Ted away from John.