Pete is first seen at night running away from his foster, abusive, hillbilly family: the Gogans with the help of an invisible force he calls Elliott carrying him further away to safety. When the Gogans get too close, Pete decides to hide somewhere in empty log until he can ditch them for good and asks Elliott to stay behind. Just then, the Gogans: Merle, Lena, Grover, and Willie come out of the open and start singing "The Happiest Home in These Hills" as a way of convincing Pete to come back with them and threatening to hurt him.
Against Pete's wishes, Elliott throws the family into a mud puddle with one swing of his tail one by one (except Merle who accidentally gets thrown in by his idiotic sons). Nevertheless, they just keep looking for Pete because Lena had paid $50 plus 50 cents legal fee for him, and had no more of that left. She claims that unless they find him, they will have to work on the farm with their own two hands. After the Gogans disappear, Pete decides to turn in for the night and Elliott goes to sleep as well.
The next morning, Pete wakes up to find Elliott, now revealed to be a green dragon when making himself visible for the first time, munching on some apples in a nearby apple tree. Pete, hungry too, joins Elliott for some breakfast. Then, he sings "Boo Bop BopBop Bop (I Love You, Too)" with Elliott to express his joy of finally being free from his foster family's tyranny. Later, he notices a sign that leads to a nearby town called Passamaquoddy. Knowing people wouldn't understand, Pete makes Elliott turn invisible during the day; much to Elliott's dismay. In town, despite the cover, Pete is falsely accused of causing so much trouble in town by the townspeople that he is considered as a source of bad luck when it is actually an invisible Elliott doing it but not on purpose.
Elliott's latest trick to mess with Miss Taylor's petticoat for rebuffing Pete provokes the entire town including the Mayor to chase after Pete and make him go into hiding. After the mob is gone, Pete scolds Elliott (now visible). Then, he meets an old man, having been to the pub, named Lampie. After a little talk with Pete, Lampie is surprised and terrified at the very sight of Elliott (still visible), which makes him run back scared to the pub and try to convince the people of what he saw while Pete angrily reminds Elliott to turn invisible again.
Later, at night, Pete takes refuge with Elliott in a cave next to a lighthouse. Still mad at Elliott, Pete refuses to play X and O's with him as Elliott tries to cheer him up. Then, Pete meets a woman named Nora, Lampie's daughter and the one who spotted him entering the cave in the first place. Pete accepts to go with Nora after she offers to provide him food and shelter. This makes Pete want to finish his game with Elliott with joy, forgive him, and return with Nora.
After having dinner and telling Nora his story, Nora allows him to stay with her then she asks him to describe Elliott to her through a song; "It's Not Easy". The next day, Pete meets Lampie again but the old man fails to recognize him until he finally notices him and starts panicking but Nora comes to calm him down. When Lampie says he wants to show Elliott to everyone as proof, Pete agrees but Nora thinks otherwise and the three proceed to have breakfast and finish up some chores while Nora goes out to buy Pete some new clothes. After the villainous quack, Dr. Terminus and his shill, Hoagy return to Passamaquoddy, Pete is happy to receive new clothes and wants to show them to Elliott along with the picture of Nora's long-lost, thought-to-be-dead fiancee, Paul in order to allow Elliott to find him for her, which both Nora and Lampie encourage him to do so even though Nora is making believe about the dragon and going along with it.
The next day, much to his reluctance, he is made to go to school by Nora, who somehow successfully manages to convince him by asking him if he wants to grow up like the Gogans. On the way to school, when some fishermen accuse Pete for making the fish disappear since they've been having a hard time catching some, Nora comes to his defense by singing a song; "There's Room for Everyone", which Pete and all the other students sing and dance to as well. Nora's song, however, managed to make the students late for Miss Taylor's class. Despite Pete lacking papers and Miss Taylor showing a dislike of him, Nora finally convinces her to take him in class as well. During class, Elliott (invisible) rings the school bell outside but when Pete tries to stop him, Miss Taylor accusses him of lying, "imagining things", and committing the act himself, thus, resulting in slapping his hands with a ruler a few times and putting him up as a Dunce as punishment. This provokes Elliott (still invisible) to go wild, break in through the school walls, scare Miss Taylor and the other students, and then break out through the walls and back to the cave after Pete scolds him, thus, school is canceled for the rest of the day, thus, convincing Dr. Terminus about Elliott's existance.
The next morning, Pete is helping Nora repaint the lighthouse while Lampie is sleeping until he is approached by Dr. Terminus and Hoagy, who intend to buy Elliott, especially since they found out that dragon parts are proven quite useful in all sorts of medical remedies last night, in exchange for $5 and a "medicine guaranteed to bring on puberty two years ahead of time" but Pete refuses even when Nora comes to his defense. After shooing Dr. Terminus and Hoagy away with the foghorn, Lampie wakes up due to the horn and joins them in repainting the lighthouse while singing "Brazzle Dazzle Day" after they decide to accept Pete into their family.
Later, the Gogans, still searching for Pete, arrive at Passamaquoddy on horse wagon. The minute they ask Hoagy about Pete while mentioning the dragon, which frightens everyone, they know they're in the right place. As Pete, Nora, and Lampie are fishing, they are approached by the Gogans; having finally found him. Despite the Gogans' efforts to convince Pete to rejoin them, Pete appears scared about going back to his old life with them but Nora and Lampie assure him that they won't let the Gogans get him again this time. As the Gogans try to catch up with Pete and his new family by boat while singing "Bill of Sale", they are rescued by an invisible Elliott diving and swimming towards the Gogans and destroying their boat in the process.
Pete is to appear in the 2016 remake, and will be portrayed by Oakes Fegley as a child and by Craig Hall as an adult. In this incarnation, it is revealed that Pete has lived in the wild with Elliott for six years; cared for and protected by the dragon.