Shocked by the appearance of Paul, Graeme agrees to give Paul a ride, but Clive is not happy about the idea. Later, Zoil (Jason Bateman), a shadowy government agent, arrives at the site of the crashed car and informs his mysterious female superior over the radio that he's closing in on Paul, and she recommends using local law enforcement as back-up. Zoil then recruits two inept FBI agents, Haggard (Bill Hader) and O'Reilly (Joe Lo Truglio), to aid in his mission, without telling them the nature of their target.
Paul, Graeme and Clive pull into a motor park run by Ruth (Kristen Wiig), a Creationist Christian, and her controlling father Moses (John Carroll Lynch). The trio bond around a fire, and Paul reveals that, ever since he was captured by the government, he had been advising them in all manner of scientific and sociological achievements including giving Steven Spielberg the idea for E.T. and inventing the character of Fox Mulder. However, he discovered that he had outlived his usefulness as a receptacle of knowledge, and the government were now intending to surgically remove Paul's brain in an attempt to harness his abilities. With help from a friend inside Area 51, Paul sent an S.O.S. to his home planet, and his people were now en route to pick him up. The government pushed up the schedule for Paul's surgery, however, prompting his rapid escape.
The next morning, Paul inadvertently reveals himself to Ruth, and then shatters her faith by sharing his knowledge of the universe via telepathic link. The trio are then forced to kidnap her and make a hasty escape. At first horrified, Ruth suddenly becomes eager to sin, which she was not allowed to do by her father. She initially doesn't trust Paul, but he heals her eye, as she has been blind in it since the age of four.
Meanwhile, Zoil, Haggard and O'Reilly talk to Ruth's father, who claims she was abducted by a 'demon'. Haggard finds a drawing of Paul that Graeme did, and becomes suspicious of Zoil's motives, especially after he accidentally over-hears Zoil report in over the radio. When Graeme, Clive and Ruth encounter the hunters from earlier, and are saved by Paul, Haggard later has his suspicions confirmed by showing the hunters Graeme's drawing, which elicits a fearful response.
Whilst stopping in a small town, O'Reilly accidentally encounters Paul in a comic book shop, prompting the foursome to flee. When Haggard and O'Reilly tell Zoil what they saw, he pulls a gun on them, and orders them to return to headquarters, before going after the RV on his own. Contrary to his orders, however, the two FBI agents follow Zoil in the same direction.
Eventually, Paul reveals his intention to return to the girl whose dog he crashed his ship on in 1947 and who subsequently saved his life, who is now an old woman, Tara Walton (Blythe Danner). After spending her life being ridiculed for what she said she saw, Tara seems grateful to see that Paul simply exists. She turns her gas cooker on to make tea, but is interrupted by Haggard and O'Reilly on one side, and Zoil on the other. As the motley crew drives off with Paul, O'Reilly shoots at them, and the gas ignites, destroying the house. A winded Zoil tries to follow, but Haggard takes off first, running Moses (who'd also been tracking the RV) off the road, and catching up to the RV. However, thanks to an error of judgement, Haggard accidentally drives off a cliff, and is seemingly killed, leaving Zoil in hot pursuit. He reassures his superior that he'll have Paul within an hour, but she declares herself tired of waiting, and informs Zoil that she's ordered a military response, prompting Zoil to shoot his radio.
When Paul, Graeme, Clive, Ruth and Tara arrive at the rendezvous, they set off a signal and wait. Eventually, eerie orange lights show up over the surrounding trees, and everyone believes that it is Paul’s race. However, it is an army helicopter, with 'the Big Guy' (Sigourney Weaver) on board, Zoil's shadowy superior. As she and three troops backing her up move to shoot Paul, Zoil arrives, and it's revealed that he was Paul's inside contact who had helped him to escape. Zoil takes out the men, but is shot in the shoulder. Tara knocks out 'the Big Guy', but Moses appears with a shotgun and shoots Graeme dead. Paul heals him, but inflicts the damage to himself (a possible side effect of his healing powers mentioned earlier in the film). Paul then collapses, exhausted. For a while, the other characters stand around his apparently lifeless body sprawled on the grass. Then, coughing, Paul props himself up, having healed himself. 'The Big Guy' regains consciousness, but is immediately crushed by the arriving alien ship. Paul leaves in the ship, and takes Tara with him.
Later, Graeme, Clive and Ruth are shown two years later, again at a comic convention, promoting their new mega-successful comic book, "Paul".
The film is rated "R" for language involving sexual themes and violence. It is set for release March 18, 2011