On November 5, 1975 in Snowflake, Arizona, logger Travis Walton (D. B. Sweeney), and his co-workers—Mike Rogers (Robert Patrick), Allan Dallis (Craig Sheffer), David Whitlock (Peter Berg), Greg Hayes (Henry Thomas) and Bobby Cogdill (Bradley Gregg)—head to work in the White Mountains.
Driving home from work, the men come across an unidentified flying object. Curious to learn more, Walton gets out of the truck and is struck by a bright beam of light from the object and is sent flying several feet backwards as if pushed by an unseen force. Fearing Walton was just killed, the others flee the scene. Rogers decides to go back to the spot to retrieve Walton, but he is nowhere to be found. Making their way back to town to report the incident, the loggers are met with skepticism, as they relate what sounds like a tall tale to Sheriff Blake Davis (Noble Willingham) and Lieutenant Frank Watters (James Garner). They are suspected of foul play despite no apparent motive or knowledge of Walton's whereabouts.
After interviewing the men, Lieutenant Watters realizes there is a great deal of tension between Walton and Dallis, leading him to believe this might be a murder investigation. The Lieutenant also discovers a tabloid newspaper in their truck with headlines about aliens, hinting that they used the article to concoct their story. The men are accused of murder and are threatened by Travis's brother Dan Walton (Scott MacDonald). The men are offered a lie detector test and take it. After the testing is complete, Rogers is outraged that the results are not shared and he and his guys refuse to come back the next day to take it again. However, after the men leave, the man who administered the tests tells the Sheriff and Lieutenant that with the exception of Dallis' test (which was inconclusive), the other men seem to be telling the truth.
Five days later, Rogers receives a call from someone claiming to be Walton. He is found at a Heber gas station, alive but naked, dehydrated and incoherent. A ufologist questions Walton but he is thrown out and Walton is taken to a hospital. Rogers visits Walton while in the emergency room and ends up telling Walton that he left him after he was struck by the light but came back to get him. Walton appears very angry by this and turns away from Rogers who blames the whole incident on Walton for getting out of the truck. During a welcome home party, Walton suffers a flashback of the abduction by the extraterrestrials.
In his flashback, he awakens inside a slimy cocoon. Breaking out of its membrane, he finds himself in a zero-gravity environment inside a cylindrical enclosure whose walls contain other similar cocoons and he is horrified to inadvertently discover that one contains the decomposing remains of a human body that has apparently been dissected and is still semi-conscious. As he makes his way to a neighboring area featuring what appear to be several humanoid space suits, he is apprehended by two extraterrestrial creatures. He is unwillingly hauled down corridors full of terrestrial detritus such as shoes and keys before arriving in a bizarre examination room. The aliens strip him of his clothes and cover him with an elastic material that pins him painfully to a raised platform under an array of equipment and lights in the middle of the room. Despite Walton's terrified screams, the aliens pitilessly subject him to a traumatic experiment in which a gelatinous substance is shoved into his mouth, his jaw is clamped open, a device is inserted into his neck and he is forced to endure an ocular probe. Afterwards, Walton loses consciousness until finding himself back on Earth disoriented and severely traumatized.
While interviewing Walton, Lieutenant Watters expresses his doubts about the abduction, believing it as merely a hoax. He notes Walton's newfound celebrity because of the tabloids' attempts to profit from his tale. The film culminates with a denouement between Walton and Rogers. The closing titles state that in 1993, the loggers were resubmitted to additional polygraph examinations, which they passed, corroborating their innocence.
The film is based on the book The Walton Experience by Travis Walton. In the book, Walton tells of how he was abducted by a UFO. Walton's original book was later re-released as Fire in the Sky (ISBN 1-56924-710-2) to promote the book's connection to the film. The real Travis Walton makes a cameo appearance in the film.
The special effects in the film were coordinated by Industrial Light & Magic, and the cinematography was handled by Bill Pope.
The original music score for the film was composed and arranged by Mark Isham. The audio soundtrack was released in Compact Disc format on March 30, 1993.
Despite mixed critical reviews upon release, Fire in the Sky has gone on to be described as a cult favorite among science fiction fans, with many praising the alien encounter scene as being among the most realistic, believable and well-executed abduction portrayals in the history of film. Prominent critic Roger Ebert offered a mildly positive review, saying "The scenes inside the craft are really very good. They convincingly depict a reality I haven't seen in the movies before, and for once I did believe that I was seeing something truly alien, and not just a set decorator's daydreams." He disliked certain aspects of the film though noting, "the movie's flaw is that there's not enough detail about the aliens, and the movie ends on an inconclusive and frustrating note." Incidentally, the scenes Ebert praised bear almost no resemblance to Walton's actual claims. Walton claimed to have flown the ship at the end of the "abduction" event, which was not portrayed in the film. Scriptwriter Tracy Tormé reported executives thought Walton's account was boring, and insisted on the changes. Chris Hicks of the Deseret News wrote "Fire in the Sky leans in favor of believers, suggesting that all of this really did happen. And some of it is fairly entertaining." However, he notes "the film tells its story in deadly earnest, and that is its greatest failing. Had the approach been more humorous or satirical, without necessarily sacrificing the sense that these characters believe it all — in the manner of Melvin and Howard, for example — it might be more palatable." Film critic James Berardinelli called the movie a "muddled-up mess", saying "It can't make up its mind whether it wants to be horror, drama or science-fiction, and consequently, succeeds as none."
Troy Brownfield of MSNBC, in a 2009 article on alien abductions in media, ranked it number seven of ten, and described the abduction scenes as "harrowing" and "genuinely frightening". Brownfield praised Torme and Lieberman's writing, saying, "Credit should go to screenwriter Tracy Torme and director Robert Lieberman, as they were called upon to punch up Walton’s original account".
The X-Files creator Chris Carter was impressed by Patrick's performance in the film, which led to his casting Patrick as FBI Special Agent John Doggett for the series' eighth season in 2000.