Ariel, a sixteen-year-old mermaid princess, is dissatisfied with life under the sea and curious about the human world. With her best fish friend Flounder, Ariel collects human artifacts and goes to the surface of the ocean to visit Scuttle the seagull, who offers very inaccurate and comical knowledge of human culture. Ignoring the warnings of her father (King Triton) and court musician (Sebastian the crab) that contact between merpeople and humans is forbidden, Ariel still longs to be part of the human world; to this end she has filled a secret grotto with all the human artifacts she has found. ("Part of Your World") While Sebastian, who was assigned to watch over Ariel and be sure she does not visit the surface again tries to convince her that its better to live under the sea than in the human world ("Under the Sea")
One night, Ariel and Flounder travel to the ocean surface to watch a celebration for the birthday of Prince Eric, with whom Ariel falls in love. A sudden storm hits, during which everyone manages to escape in a lifeboat except for Eric who goes and rescues his dog Max, who was still trapped on the ship. He saves Max but almost drowns but is saved by Ariel, who drags him to the beach. She sings to him, but when he stirs awake he sees a vision. She dives underwater when Max comes to Eric. Eric has a vague impression that he was rescued by a girl with a beautiful voice; he vows to find her, and Ariel vows to find a way to join Eric. ("Part of Your World (reprise)")
Triton and his daughters notice a change in Ariel, who is openly lovesick. Triton questions Sebastian about Ariel's behavior, during which Sebastian accidentally reveals the incident with Eric. Triton furiously confronts Ariel in her grotto, using his trident to destroy her collection of human treasures. After Triton leaves, a pair of eels, Flotsam and Jetsam, convince a crying Ariel that she must visit Ursula the sea witch, who can supposedly make all her dreams come true.
Ursula makes a deal with Ariel to transform her into a human for three days ("Poor, Unfortunate Souls"). Within these three days, Ariel must receive the "kiss of true love" from Eric; otherwise, she will transform back into a mermaid on the third day and belong to Ursula. As payment for legs, Ariel has to give up her voice, which Ursula magically traps in a shell she wears as a locket. Ariel's tail is transformed into legs and Sebastian and Flounder drag her to the surface.
Eric and Max find Ariel on the beach. He initially suspects that she is the one who saved his life, but when he learns that she cannot speak, he discards that notion—to both the frustration of Ariel and Max (who knows the truth). He helps her to the palace, where the servants think she is as a survivor of a shipwreck. Ariel spends time with Eric, and at the end of the second day, they almost kiss ("Kiss the Girl") but are thwarted by Flotsam and Jetsam. Angered at their narrow escape, Ursula takes the disguise of a beautiful young woman named "Vanessa" and appears onshore singing with Ariel's voice. Eric recognizes the song, and in her disguise, Vanessa/Ursula casts a hypnotic spell of enchantment on Eric to make him forget about Ariel.
The next day, Ariel finds out that Eric will be married to the disguised Ursula on a ship. She cries and is left behind when the wedding barge departs. Scuttle discovers that Vanessa is Ursula in disguise, and informs Ariel. Ariel and Flounder chase the wedding barge, Sebastian informs Triton and Scuttle is assigned to literally "stall the wedding." With the help of various animals, the nautilus shell around Ursula's neck is broken, restoring Ariel's voice back to Ariel and breaking Ursula's enchantment over Eric. Realizing that Ariel was the girl who saved his life, Eric rushes to kiss her, but the sun sets and Ariel transforms back into a mermaid. Ursula reverts to her true form and she kidnaps Ariel.
Triton appears and confronts Ursula, but cannot destroy Ursula's contract with Ariel. Triton chooses to sacrifice himself for his daughter, and is transformed into a polyp. Ursula takes Triton's crown and trident, which was her plan from the beginning. Ursula uses her new power to gloat, forming a whirlpool that disturbs several shipwrecks, one of which Eric commandeers. Just as Ursula is set to use the trident to destroy Ariel, Eric turns the wheel hard to port, in effect ramming the ship's splintered bowsprit through Ursula's abdomen.
With Ursula gone, her power breaks and the polyps in Ursula's garden (including Triton) turn back into the old merpeople. Later, after seeing that Ariel really loves Eric and that Eric also saved him in the process, Triton willingly changes her from a mermaid into a human using his trident. She runs into Eric's arms, and the two finally kiss. Ariel marries Eric in a wedding where both humans and merpeople attend.
Set some unspecified time after the events of the original film, the film begins with a celebration for Ariel and Eric's newborn daughter Melody on a ship at sea. Ariel's father King Triton presents baby Melody with a magic locket. The party is interrupted by Morgana, sister of the deceased Ursula, who threatens to cause Melody harm, using her as leverage to get Triton's trident. Ariel and Eric work together to foil Morgana's plan.
Fearing Morgana and remembering Ursula, Ariel decides to withhold all knowledge of the sea world from Melody. The locket is tossed into the ocean, and a massive wall is built to separate the royal castle from the sea.
Twelve years later, Melody remains unaware of her mother’s mermaid heritage and is banned from ever going into the sea. However, she has been sneaking out the castle regularly to swim and one day finds her locket. Seeing her name on the locket, Melody confronts her mother in an explosive argument. Angry at her mother's refusal to answer her questions, Melody takes a boat and sails away from home. Her parents soon learn that she is gone, and Triton uses his magic to transform Ariel back into a mermaid to search for Melody.
Melody is lured to Morgana’s lair by her manta rays, and Morgana uses the remains of Ursula's magic to temporarily transform Melody into a mermaid. Morgana says that the transformation will be permanent if Melody can get hold of the trident, which she claims was stolen by Triton. With the help of Tip the penguin and Dash the walrus, Melody successfully returns to Morgana with the trident. Ariel tries to stop Melody, but before she can explain that Morgana is evil, Melody gives the trident to Morgana. With the trident in her grip, Morgana reveals her true intentions and grabs Ariel with her tentacle and holds her hostage.
Morgana uses the trident's magic to lord over the ocean, rising to the surface to gloat. Scuttle, Triton, Sebastian, and Eric arrive, and a battle ensues against Morgana and her minions. Melody manages to grab the trident and throw it back to Triton by climbing up the cliff on which Morgana is standing and sneaking up on her. Triton uses his trident to encase Morgana in a block of ice, which sinks underwater.
Melody reunites with her family, and Triton offers his granddaughter the option of becoming a mermaid permanently. Instead, she uses the trident to disintegrate the wall separating her home from the sea.
King Triton and his wife, Queen Athena, rule over the underwater kingdom of Atlantica, which is filled with music and laughter. They have seven young daughters, the youngest of whom is Ariel. The merfolk are shown relaxing in a lagoon above water, and Triton gives Athena a music box. Suddenly, a pirate ship approaches. Everyone escapes except Athena, who is crushed by the ship when she tries to save the music box. Devastated by Athena's death, Triton throws the music box into the ocean and bans music from the kingdom.
Ten years later, Ariel and her six older sisters live under a strict routine maintained by their governess, Marina Del Rey and her assistant Benjamin. Marina hates being the girls' governess and longs to be Triton's attaché, a job currently filled by Sebastian the crab. Ariel is frustrated by their current lifestyle, which brings her into conflict with her father. One day, Ariel encounters Flounder, a young fish whom she later follows to an underground music club. She is overjoyed by the presence of music, and is shocked when she sees Sebastian performing there. When her presence is revealed, the entire band stops playing and hides, believing Ariel will tell her father about them. Ariel sings a song explaining her love of music and the remembrance of her mother and she joins the club with an oath.
Ariel returns to the palace, and her sisters confront her over her disappearance. She explains where she was, and the following night all seven sisters go to the club to have fun. Marina secretly finds them, and she later reports their activities to Triton. Sebastian, Flounder and the band are sent to jail, while Marina gets the job she wants.
Triton confines his daughters to the palace, which results in Ariel asking him why music isn't allowed. Triton refuses to answer and shouts that he won't have music in his kingdom. Distraught, Ariel says that Athena wouldn't have wanted music to be forbidden and angrily swims to the girls' bedroom, her saddened sisters soon following. That night, she decides to leave Atlantica and frees the jailbirds. Sebastian leads them to a deserted place far from the palace where Ariel finds Athena's music box, as Sebastian hoped. Ariel and Sebastian decide to return to Atlantica to bring the music box to Triton, hoping that it will change his mind, as he had forgotten how to be happy after Athena died.
On the way back, they are confronted by Marina and her electric eels. Marina wants to stop them so she will retain her position of "power", and a struggle ensues. It ends when Marina barrels towards Sebastian, but Ariel pushes her away, getting hit in the process. Triton arrives in time to witness this, and he is remorseful for his actions. He sings the lyrics of "Athena's Song", and Ariel wakes up. The film ends with Triton restoring music to Atlantica and appointing Sebastian as the new court composer, much to everyone's glee. Everyone rejoices except Marina, who has been sent to prison.
