ET, an enthralling tale (5)
I believe the answer is:
alien
'et' is the definition.
(I've seen this before)
'an enthralling tale' is the wordplay.
'enthralling' is an insertion indicator.
'tale' becomes 'lie'.
'an' going around 'lie' is 'ALIEN'.
(Other definitions for alien that I've seen before include "Unfamiliar; foreign" , "Belonging to a foreign country" , "Foreign (from outer space?)" , "extraneous" , "Foreign, strange" .)