Can I react with Star Crossed to Elder Dragon's played ability when my opponent plays it?

Yes, you can react to the Elder Dragon's "When you play me" ability with Star-Crossed.

Why this works:

1. Chain Rules: When you play a unit with a "When you play me" (WYPM) triggered ability, the unit enters the battlefield immediately, and then the ability is placed on the chain. Placing this ability on the chain creates a Closed State, which allows players to play [Reaction] cards.
2. Star-Crossed as a Reaction: Because Star-Crossed has the [Reaction] tag, it can be played while the chain is in a Closed State to target abilities already on the chain.

Sequence of Events:

1. Opponent plays Elder Dragon: The unit enters the battlefield.
2. Triggered Ability: The "When you play me" ability is placed on the chain. This creates a Closed State.
3. Your Reaction: You play Star-Crossed as a [Reaction], adding it to the top of the chain, targeting a friendly unit and an enemy unit (which can include the Elder Dragon itself, if you choose).
4. Resolution (LIFO - Last-In, First-Out):
   • Star-Crossed resolves first: It returns the targeted friendly unit and the targeted enemy unit to their owners' hands.
   • Elder Dragon's ability resolves second: The ability attempts to resolve against its remaining targets. If the targeted enemy unit was returned to the hand by Star-Crossed, that specific portion of the effect fails to execute because the target is no longer available.

According to the rules regarding chain interaction, any ability placed on the chain is a valid target for reactions unless it is a passive ability (which does not use the chain) or a permanent entering the board. Since the "When you play me" effect is a triggered ability on the chain, it is perfectly legal to react to it.