The footage begins with what appears to be a normal home video of the McPherson family gathered for Thanksgiving dinner. (This footage is eventually interrupted with occasional "expert" interviews on the subjects of UFOs, alien abduction, and related topics.) After the electric power goes out during dinner, Kurt and Brian go outside to check the fuses; Tommy follows with his camera. After finding the fuses charred and partially melted, they head into the woods to investigate a transformer which is throwing sparks.
They find a UFO in a nearby field. As they watch from the treeline, two aliens exit the ship and use a ray-gun on a cow. Despite their attempt to remain hidden, the three men are spotted. One of the aliens raises its weapon and burns Brian's hand. They rush back to the house and try to convince their incredulous family to flee while there is still time. They see lights in the sky and a furtive figure outside a window, but the family refuses to believe the brothers' story until Tommy plays them the tape. Suddenly, a high-frequency screech incapacitates everyone but five-year-old Rose. When it stops, Kurt straps a flashlight to his shotgun and decides to get everyone in his truck and leave.
The truck will not start. The battery has melted so they return to the house. As they take stock of the situation they hear scrabbling sounds from the roof and discover that an alien has made its way in through an open window. Kurt leads the way up the stairs and begins to search. Tommy takes the opportunity to go into his bedroom and change his soiled pants when he is ambushed by an alien—it (apparently) puts him in a trance, investigates his camera, and slips away, leaving Tommy with no memory of the encounter. Tommy is awakened by the shouts of Kurt, who has trapped an alien in an adjacent room. They are greeted by a laser shot and Kurt responds with his shotgun. Everyone retreats downstairs.
A ball of light floats into the house and puts Renee into a coma. Kurt and Brian go outside to try to swap out the truck battery in a final attempt to get the family to safety and take Renee to a hospital. Seemingly minutes after they leave, gunshots are heard outside and the lights begin to flicker. Those who remain experience a series of vivid auditory and visual hallucinations to which Rose seems to be immune. Tommy puts the camera down, and in a moment when she is left alone, Rose takes the shells out of the remaining shotgun. Later, everyone (except Rose) feels a burning sensation on the backs of their necks where they discover triangle-shaped burns.
The group becomes hysterical as more shots are heard. They go outside where Tommy discovers a couple of mangled shotguns, but not his brothers. The camera pans towards the woods to reveal strange lights and two approaching figures. Everyone races back into the house where they barricade themselves in. The camera is dropped and goes black. Tommy then gives a tearful testimonial and wonders if he will live to see tomorrow. He searches through all the rooms and suddenly comes face-to-face with an alien. Tommy drops the camera and stands frozen in a trance-like state. The tape stops. The family and their guests have not been seen since.
An alternate ending is presented in an extended version of the film, made available after the initial television airing. In it, the family is seen re-entering the house and, after the death of Renee, the survivors gather around the table to eat in order to keep up their strength and spirits. It is implied that Rosie unlocks the front door because the aliens gain entry to the house and subdue the family with what appears to be psychic powers. An alien disables the camera as the family is seen following the aliens out of the house.
Created by Kenneth Cueno Productions, and directed by Dean Alioto, the film portrays a family named the McPhersons being abducted by extra-terrestrials in Lake County, Montana. It is a remake of The McPherson Tape, a home-video-style pseudo-documentary/thriller film created by the same director. The fact that it is a remake of another tape led to confusion over which was the original tape and if the original was authentic. This was due to the fact that most were unaware that The McPherson Tape was in fact a work of fiction. The entire incident was recorded on a home video camera by the actor who played the McPherson's 16-year-old son. This was to appear as though it was a film of actual events.
The program caused a level of confusion and controversy upon its initial telecast that echoed earlier reality-muddying incidents such as Orson Welles' War of the Worlds radio broadcast. Very much like the Orson Welles' broadcast, the Alien Abduction: Incident in Lake County aired on UPN immediately following Real Vampires: Exposed!, which offered a tabloid-like investigation of vampires, leading some viewers to believe that Alien Abduction: Incident in Lake County was also portraying real events. Another way in which this video misled its viewers, was the way in which it was filmed. The style would soon be made popular through The Blair Witch Project. UFO researchers, including Stanton Friedman, were not informed of the nature of the show by the program's producers, and controversy and confusion also centered on the lack of disclaimers. The program was believed to be based on a factual event, however the supposed "original" tape that the program was based on, was actually another science fiction thriller movie by the same director.
Debate over the hoax nature of the program occurred on Internet chat rooms and bulletin boards, where the program's status as fiction was exposed thanks to the character of Tommy McPherson being linked to actor Kristian Ayre. The program was also proved to be a hoax when an interview with the Lake County Sheriff's department stated that no one named McPherson lived in Lake County at the time. Some viewers continued to insist that portions of the program were fabricated but that the McPhersons' experience itself was real, and others that the program itself was evidence of a conspiracy. The show was subsequently broadcast in New Zealand on TVNZ channel 2, with a disclaimer that its authenticity was still 'a topic of dispute' in the United States. TVNZ nevertheless cut the show's final credits, "prevent[ing] New Zealand audiences from noting that the McPhersons were played by actors."
TVNZ programmers pointed out that the subject matter of the mockumentary made it a clearly obvious spoof.