We study the machine’s understanding of embodied reference: One agent uses both language and gesture to refer to an object to another agent in a shared physical environment. Of note, this new visual task requires understanding multimodal cues with perspective-taking to identify which object is being referred to. To tackle this problem, we introduce YouRefIt, a new crowd-sourced dataset of embodied reference collected in various physical scenes; the dataset contains 4,195 unique reference clips in 432 indoor scenes. To the best of our knowledge, this is the first embodied reference dataset that allows us to study referring expressions in daily physical scenes to understand referential behavior, human communication, and human-robot interaction. We further devise two benchmarks for image-based and video-based embodied reference understanding. Comprehensive baselines and extensive experiments provide the very first result of machine perception on how the referring expressions and gestures affect the embodied reference understanding. Our results provide essential evidence that gestural cues are as critical as language cues in understanding the embodied reference.