Echo's spaceship is under the neighborhood, and the highway construction is a cover so the government agents can find it. Alex puts Echo in the spaceship, and then it springs up from underground and flies away. Alex and Munch's families move away, but Tuck's family stays in the neighborhood.
Alex, Munch, and Tuck are teenage friends whose families are being forced out of their neighborhood due to the construction of a new highway. Two days before the families are to leave, the boys suddenly receive unusual signals on their cellphones, which turn out to be maps that lead into the desert. The next night, the boys, armed with several camcorders, ride their bikes out into the desert. The boys then find a piece of metal, which contains a small alien that resembles a baby owl. They name it Echo, because it mimics their sounds. Through a Q&A session, the boys learn that Echo is a friendly alien who was shot down and his spaceship is in pieces. Echo needs the boys to help find the pieces to the spaceship, which can be reassembled and flown back to his homeworld.
The boys, through the use of maps that Echo puts on their cellphones, travel throughout the area to various locations to find the pieces to his spaceship, including a pawn shop, bar, video arcade, and even the home of Emma, a girl that Tuck has a crush on. Emma learns of their mission and joins them. While this is going on, the group are being followed by the highway construction workers, who are actually government agents trying to find the alien and the spaceship. They saw the boys in the desert and suspected they had the alien with them. The agents catch up to the group at a diner, take Echo, and drive off. However, Munch stows away in their truck and calls Tuck to let them know where they are going.
The group catch up to Munch at the highway construction site, where they are captured by the agents. They admit to shooting down the spaceship and want the alien so they can destroy the ship before the alien can kill all of humanity. They don't believe the kids when they say he's harmless. Since Echo only responds to the kids, the agents want them to get Echo to reveal the location of the ship. Before they can do that, the group escapes with Echo and follow the last map, which takes them back to their neighborhood. It's at this point that the kids figure out that the ship is under the neighborhood, and the construction is just a cover so the homes can be destroyed and the agents can dig up the spaceship. Echo is able to open a hole in the ground, revealing a tunnel. Alex then takes Echo and goes into the hole.
The hole and tunnel lead to the cockpit of the spaceship. Alex places Echo in the "drivers seat" and tearfully says goodbye to him. As Alex emerges out of the hole, metallic pieces begin springing up out of the ground and begin forming the spaceship. When the ship is complete, it flies away. Everyone in the neighborhood wakes up to the noise and thinks all of the holes are a result of an earthquake. Only Munch's mother sees the spaceship, but no one believes her. The agents, seeing the ship fly away and not attacking, leave the area.
The movie ends a short time later. It was announced that the highway project was cancelled, so everyone in the neighborhood can stay. However, Alex and Munch's families had already sold their homes. After a tearful goodbye, Alex and Munch move away, leaving Tuck as the only one left from the original trio still in the neighborhood. He and Emma remain friends, and he eventually made new friends from the families that moved into the neighborhood.