Ariel, a sixteen-year-old mermaid princess, is dissatisfied with underwater life in the kingdom of Atlantica and is curious about the human world. With her best friend Flounder, Ariel collects human artifacts in her grotto and often goes to the surface of the ocean to visit Scuttle, a seagull who offers very inaccurate knowledge of human culture. She ignores the warnings of her father King Triton, the ruler of Atlantica, and Sebastian, a crab who serves as Triton's adviser and court composer, that contact between merpeople and humans is forbidden.
One night, Ariel, Flounder, and an unwilling Sebastian travel to the ocean surface to watch a celebration for the birthday of Prince Eric on a ship. Ariel quickly becomes enamored with Eric. The birthday celebration is cut short by a violent storm which destroys the ship and tosses Eric overboard. Ariel rescues him and brings him to shore. She sings to him, but quickly leaves after as he regains consciousness to avoid being discovered. Fascinated by the memory of her voice, Eric vows to find who saved and sang to him, and Ariel vows to find a way to join him and his world. When Triton learns of Ariel's love for Eric, Triton confronts her in the grotto and destroys most of the artifacts with his trident. After Triton leaves, two eels named Flotsam and Jetsam convince Ariel to visit Ursula the sea witch.
Ursula tricks Ariel into making a deal to transform her into a human for three days in exchange for Ariel's voice, which Ursula puts in a nautilus shell. Within these three days, Ariel must receive the "kiss of true love" from Eric. If Ariel gets Eric to kiss her, she will remain a human permanently, otherwise, she will transform back into a mermaid and belong to Ursula. Ariel accepts and is then given human legs and taken to the surface by Flounder and Sebastian. Eric finds Ariel on the beach and takes her to his castle, unaware that she is the one who had rescued him earlier. Ariel spends time with Eric, and at the end of the second day, they almost kiss but are thwarted by Flotsam and Jetsam. Angered at their narrow escape, Ursula sets a trap for Eric and Ariel: she disguises herself as a beautiful young woman named Vanessa and hypnotizes Eric with her singing voice. Realizing that that Vanessa is actually Ursula in disguise, Scuttle informs Ariel of Ursula's plan to marry Eric while Sebastian informs Triton about Ursula's actions. Aided by her friends, Ariel stops Eric's wedding to Ursula, destroying the nautilus shell around Ursula's neck and restoring Ariel's voice. Realizing that Ariel is the girl who saved his life, Eric rushes to kiss her, but the sun sets and Ariel transforms back into a mermaid before Ursula kidnaps her. Triton furiously confronts Ursula and demands Ariel's release, but the deal is inviolable. Ursula tricks Triton into taking Ariel's place as Ursula's prisoner, giving up his trident. Ariel is released as Triton transforms into a polyp. Ursula steps forward as the new queen, but before she can use the trident, Eric intervenes with a harpoon. Ursula attempts to kill Eric, but inadvertently kills Flotsam and Jetsam in the process. Enraged, Ursula uses the trident to expand into monstrous proportions.
Ariel and Eric reunite on the surface before Ursula gains full control of the entire ocean, creating a storm and bringing sunken ships to the surface. Attempting to kill Ariel, Ursula is herself killed by Eric using one of the wrecked ships. With Ursula gone, Triton and the other polyps are restored to their original forms. Realizing that Ariel truly loves Eric, Triton willingly changes her from a mermaid into a human and approves her marriage to Eric. Ariel and Eric marry on a ship and depart.
- The storyline continues in Brian and the Eeveelution Family's Adventures of The Little Mermaid II: Return to the Sea.