The Israelites come to Mt. Sinai, where God invites them into a covenant relationship. He wants to make them his representatives to all the nations and come to personally live in their midst. But Israel rebels by making an idol of the golden calf, which is just a really bad idea.
After God delivers the Israelites from slavery in Egypt, He leads them through the wilderness back to Mt. Sinai where Moses first met Him in the second half of the Book of Exodus. There, the Israelites prepare themselves for a miraculous encounter with the Lord - God Himself will come down to the top of the mountain, where He will fellowship and establish Abraham's covenant with them!
Moses spends 40 days with Him on the mountain, but the Israelites are afraid and stay at the bottom. The story takes a tragic twist when Aaron helps the Israelites fashion a golden idol and worship it - right at the foot of the mountain - while Moses is away. God considers wiping them out for the atrocity and making a new nation from Moses instead, but changes His mind when Moses intercedes and reminds Him of Abraham's Covenant, further showing us God's character of love and justice.