Gibson plays an Episcopalian minister who "has been shut down by a devastating life experience." Although the plot revolves around crop circles, its producer, Frank Marshall, said, "It's really about human emotions set in motion by a supernatural event." Shyamalan, who plays a neighbor in the film, was inspired by The Invasion of the Body Snatchers and The Birds.
Caution: WIKIPEDIA CONTAINS SPOILERS: (This means that Wikipedia plot summaries give away major plot points.)
The film is about a rural family that lives on a farm. The father, played by Gibson, is a former Episocopalian minister who has lost his faith after his wife is killed in a horrific accident by a drunk driver. No longer practicing religiously, he lives with his brother, played by Joaquin Phoenix, and his young daughter and son. Things are fairly steady in life until a mysterious crop circle appears in his corn field. Its origin and purpose is unknown. Some in the town speculate that it may be a prank; a few believe that it may have been created by intelligent alien lifeforms.
Throughout the film we learn that his daughter has a peculiar aversion to water that isn't freshly from the faucet; she constantly says things like "the water is contaminated", and is always asking for a fresh glass of water, leaving behind half-consumed glasses of water around the house (or whatever dwelling she happens to be in.)
As the story progresses, it is clear that Gibson's farm is under watch, and he and his brother chase a dimly seen person who was spying on them at night from the roof of their farm. The being disappears into the crops, moving faster and disappearing far easier than anyone can explain. Soon Gibson's character is shocked to learn that similar crop circles have suddenl appeared all around the world, in ways too similar and created too quickly to merely be a hoax.
As the movie progresses, we see more televised news reports of crop citings around the world, followed by citings of presumed alien beings. This is followed by a citing of numnerous UFOs (unidentified flying objcts), presumed to be of alien origin. The sitution turns dangerous when the UFO's suddenly become invisible; due to birds flying into them and falling, however, the government and news agencies are certain that they still are there.
The movie picks up its pace when Gibson visits the home of the man who accidentally killed his wife (her last words were for him to tell his brother to "swing away.") The wounded doctor's enigmatic discussion expresses regret for killing Gibson's wife, his theories about what his happening, and the cryptic but terrifying last line "I locked one in the kitchen closet". Upon investigating, Gibson indeed finds something intelligent and alive locked in the man's kitchen closet, only dimply seen in the reflection of a knifeblade. When it lunges for him Gibson cuts off one of the intruder's fingers.
Gibson returns home with the news that the entire world is now under attack from alien invaders. There is no safe place to hide. Gibson and his family board up their house. The aliens invade his home, but he hides in the basement with his family and manages to not be caught. In the basement, his young son has a serious asthma attack when he is nearly caught by an alien.
The next morning they return upstairs to discover their house ransacked. The local news reports that the aliens invaded the whole world, kidnapping people by gassing them. It is never explained what their purpose was, but the director (M. Nigh Shyamalan) has suggested that they were harvesting humans for food. At this point in the film, all of the aliens appear to have left the planet; humans have discovered that water harms the aliens. The aliens have even left their wounded behind. Before they can celebrate, the alien whom Gibson mutilated earlier appears and takes his son into his arms. It sprays from its arm a poisonous gas, which we now understand to be the way that it attacks and incapacitates people.
Phoenix, a former baseball player, begins to attack the alien with a bat (Gibson tells him to "swing away." The alien falls backwards into a half-full glass of water that the daughter left out, and it burns through his flesh and kills it. They discover that because of the asthma attack, the son's lungs were closed off and the gas did not penetrate. Gibson regains his faith because he feels that the messages from his dying wife was sent to her by God in order to save the life of their son.