John received Teddy, a stuffed bear, on his birthday when he was a little boy, and wished that he would become alive. Now, he has to maintain the balance between his relationship with Ted, and his relationship with his girlfriend, Lori.
Ted and Tami-Lynn's plan to have a baby hits a major snag when the court refuses to recognize Ted, who is a teddy bear, as a person. With his best friend John's help, Ted embarks on a journey to sway the ruling of the law in order to have a family with his beloved.