| Director | Jeff Wadlow |
|---|---|
| Budget | $10 million |
| Box office | $43.8 million |
Children's book author Jessica is married to divorced musician Max. Max has two daughters from his first marriage: younger daughter Alice, and teenager Taylor. Jessica is plagued by nightmares that include her mentally ill father Ben and a fictional character from her books, Simon the spider. When the family moves into Jessica's childhood home, Alice discovers a teddy bear named Chauncey and forms a bond with him. An elderly neighbor, Gloria, who babysat Jessica when she was a child, shares memories of Jessica's childhood that she cannot remember.
Max leaves for a tour and Chauncey begins to disturb Jessica. One day, Taylor invites over a friend, Liam, who is toyed with by Chauncey; the teddy briefly turns into a monstrous bear. Jessica narrowly stops Alice from slamming her hand down onto a nail, prompting her to call child psychologist Dr. Soto. She discovers that only she and Alice can see the stuffed bear. Soto shows her footage of a past patient who used the same phrase as Alice: "Never Ever". Alice disappears, for which Taylor blames her stepmother.
Gloria tells Taylor that Chauncey was also Jessica's childhood imaginary friend and explains that imaginary friends are actually spirits who tether to the young and can become sinister if abandoned. Jessica goes through her old belongings and finds drawings of Chauncey and "The Never Ever", which is, in fact, the otherworldly realm that connects all imaginary friends. Jessica, Gloria and Taylor complete Chauncey's scavenger hunt together, resulting in a glowing door leading to The Never Ever.
Here, they find Jessica's repressed memories. As a child, she was lured by Chauncey into the Never Ever. Ben rescued her, but was driven mad after seeing Chauncey's eyes, resulting in Jessica being sent to live with her grandparents. Gloria closes the escape route, having become obsessed with the realm. She reveals to the horrified family that she had been in contact with Chauncey who has promised her the power of the Never Ever if she brought them there, but is then mauled to death by Chauncey in the midst of her insane rant. Throughout their search for Alice in The Never Ever, Chauncey stalks and torments them constantly until they successfully locate and rescue Alice. Jessica stops Chauncey in the midst of his pursuit by stabbing him in the eye with scissors.
After reuniting with Ben and Max at Ben's institution, Jessica realizes she is still stuck in The Never Ever. Chauncey used Alice as bait to get to her and seeks revenge for her abandoning him. Taylor saves her and Chauncey transforms into his true form akin to Simon, chasing them to the doorway. The spider attempts to drive them insane with his eyes, but Alice sets the creature on fire and seals him behind the door. The family escapes as the house burns to the ground.
The family checks into a hotel but are frightened by a child playing with a teddy bear. They leave for another hotel for their safety. As the child argues with his mother about his imaginary friend, it is shown that the bear looks like Chauncey.