E.T. the Extra Terrestrial, Steven Spielberg's high-grossing 1982 film, included a clip from Sesame Street. During a scene with E.T. and Gertie (played by Drew Barrymore), the show is playing on the TV long enough for two sketches to appear. The first is an animated film about the letter B that aids E.T. in learning how to speak. The second scene features Big Bird introducing Grover in the courtyard as he demonstrates two chin-ups (this scene has been released commercially on Old School: Volume 1 as an insert for Episode 0536). The audio that ends the scene, however, was taken from Episode 1364 to provide a more appropriate dialogue for the film: Big Bird observes a rocket ship and remarks, "I think it came from outer space," just as E.T. begins to communicate his desire to phone home.
- The film's story was the basis for a comic spoof featured in the January 1983 issue. "E.C. the Extra-Celestial" featured Gonzo in the role of a visiting alien who takes up residence with the Muppets, creates a psychic bond with Kermit, watches Sesame Street with Annie Sue Pig, and finds himself under the microscope of Muppet Labs.
- E.T. makes an appearance in another comic book story published in the Summer 1983 issue. He doesn't speak or take part in the story, but appears to be a part of the crew of the Millenium Falcon from Star Wars.
- When Gonzo and Ethan Hawke take off for the stars in a home-made spaceship fueled by oatmeal in the Fall 1985 issue, Camilla sends them off with a farewell sign that reads "Phone Home." Her message echoes a famous line from the 1982 film when E.T. communicates a desire to contact his people.
- The Winter 1986 issue features a photo spread for an interview with Hollywood sound designer Mark Mangini. Dr. Bunsen Honeydew is pictured controlling a device created in Muppet Labs to create sound effects. Of the various parts labelled on the side is a phone with a sign that reads "Phone Home," another reference to a famous line from E.T.
- In a 1984 episode, "What Do You Want to Be When You Grow Up?" a brief clip from the movie is shown when Baby Piggy and Baby Kermit imagine themselves being movie stars. As Kermit arrives, the clip of Gertie screaming is used. Later in the episode, when Kermit imagines himself as a taxi driver to the moon, E.T. himself, unseen (voice by Frank Welker) asks for a ride home.
- In another 1984 episode, "From a Galaxy Far, Far Away", the Babies find Irma, a strange creature who they assume is an alien, left behind on Earth. They attempt to contact the alien's family, and build a giant slingshot to send her home. The creature turns out to be a koala who escaped from the zoo. The basic plot is a similar take on the events of E.T. - The Extra Terrestrial -- save for the slingshot and the koala.
- Yet another 1984 episode, "Eight Take-Away One Equals Panic," features the song "Table for One" in which the Muppet Babies try to convince Baby Fozzie that flying solo can be okay. During the song montage, Baby Piggy cruises by in a flying saucer and makes reference to E.T. in the lyrics.
- In the 1987 episode "This Little Piggy Went to Hollywood," Baby Piggy dreams of being discovered by a famous director in a record store. In walks Steven Weirdbird (played by Baby Gonzo) looking to cast a role in his latest film, "ET's Close Encounter with Indiana Jaws."
- In a Sesame Street News Flash, the Martians descend onto Old MacDonald's Farm. They address reporter Kermit the Frog as "E.T.?"
- A lyric from "Now You Has Jazz" improvised by Billy Crystal in episode 103 mentions "E.T. phone home."