Hoping to further his creator's work and perpetuate his species, Data creates an android named Lal, who receives Data's programming through neural transfers. Although Picard is apprehensive about Starfleet's reaction to the unauthorized experiment, he allows Data to continue his research.
Allowed to select its own appearance, Lal chooses the form of a human female. As she becomes increasingly capable of perception and feeling, Data enrolls Lal in school so that she can assimilate human behavior. When the android has difficulty fitting in with the children, Guinan agrees to let her work in Ten Forward, where she can supervise Lal's socialization process, and where Lal can study many different kinds of people.
Meanwhile, Starfleet Admiral Haftel learns of Data's creation and informs Picard that he wants to transfer Lal to a research station where he can more closely monitor her progress. When Picard refuses, citing Lal and Data's mutual need to remain together for full developmental growth, Haftel gets permission to come aboard the U.S.S. Enterprise to observe Lal and is empowered to remove her from the ship if he is dissatisfied by what he sees.
Despite all evidence to the contrary, Haftel is convinced that a bar is an unacceptable environment for Lal and orders her removed from Ten Forward. He then meets with Lal in the hopes of convincing her to leave the Enterprise, but she firmly states her desire to remain with her "father" Data and the crew. Upset by her meeting with the Admiral, Lal seeks out Troi, who is stunned to sense the emotion of fear emanating from the android.
After Haftel informs Data that Lal will be taken from the starship, Picard states his intention to defy the admiral's orders, but their face-off is interrupted by an emergency call from Troi. Data and Haftel rush to Lal's side, only to find that she is dying. Troi tells them that Lal's functions broke down after experiencing an extraordinary range of feelings in the counselor's presence.
In a valiant effort to save Lal, Haftel joins Data in repairing the android's malfunction, but her neural pathways shut down faster than they can fix them. After Lal thanks Data for her life and tells him that she loves him, her neural system fails and she expires. Unable to experience the grief and emotion the crew feels at Lal's loss, Data must be content with Lal's memories of life, which he transfers to his brain.