King William, widowed father of newborn Princess Odette, and Queen Uberta, widowed mother of young Prince Derek, decide to betroth their children in the hopes of uniting their kingdoms. Rothbart is an evil enchanter who wishes to take William's kingdom for himself, but before he can make his move, he is attacked by William's men. Although banished from the kingdom, Rothbart vows to return.
William and Uberta have Odette and Derek meet every summer in the hopes that they'll fall in love. As children this fails miserably, but when the years pass and the two reach adulthood, they do fall in love. Derek declares that the wedding preparations begins, but when he expresses his wish to marry Odette solely for her beauty, she rejects him for good. Odette and William leave Uberta's castle, and they are intercepted by Rothbart, who transforms into a "Great Animal" (a mythological creature with the head of a wolf, the body of a bat, the feet of an eagle, and the tail of a lizard), kidnaps Odette and fatally injures William. Derek arrives on the scene, where William tells him with his dying breath that they were attacked by a "Great Animal", and that Odette is "gone". Believing that Odette is dead, Uberta encourages Derek to find another princess, but he is determined to find Odette. He and his best friend Bromley practice hunting every day in preparation for facing the Great Animal.
Elsewhere, Rothbart is keeping Odette at his castle lair at Swan Lake. He has cast a spell that turns Odette into a swan during the day, and she is able to temporarily turn human at night if she is on the lake under moonlight. Every night Rothbart asks Odette to marry him so he can rule William's kingdom legally, but she always refuses. During her captivity, she befriends a turtle named Speed, a frog named Jean-Bob and Puffin, a puffin. Odette has also made friends with Hubie, Marina and their friends, Rocko, Petra, Beanie, Timmy, Pikatwo, Bonkers and Fawn (who joined them in the last adventure).
Puffin, Petra, Beanie, Timmy and Odette, in her swan form, fly together to find Derek. By chance they stumble upon Derek in the woods, for he is searching for the Great Animal with Bromley. Derek mistakes Odette for the Great Animal and tries to kill her. The ensuing chase leads Derek to Swan Lake, where he witnesses Odette's change from swan to human when the moon rises. The two share a loving reunion, and Odette and Hubie explain that the spell can only be broken by a "vow of everlasting love" that's "proven to the world". Derek invites Odette to his mother's ball the following night, in the hopes of declaring to the world of his love for her. Derek leaves just as Rothbart arrives. The enchanter has heard the whole conversation and imprisons Odette as a swan in the castle dungeon, along with Bromley whom he had found in the woods.
Rothbart, worried about Derek's vow, sends his hag sidekick to the ball disguised as Odette. Odette's friends, along with Hubie and his friends free her from the dungeon and she flies to Uberta's castle, but she is unable to warn Derek in time. Derek makes the vow to the wrong woman, which causes the spell to start killing Odette. Derek realizes his error and races after Odette back to Swan Lake. Odette transforms back into a human just before she dies in Derek's arms. A furious Derek confronts Rothbart, saying he should not let Odette die and is the only one with the power. Rothbart transforms into the Great Animal. A battle ensues with Rothbart overpowering Derek and Pikatwo, nearly killing them. Jean Bob return Derek's longbow to him, and Bromley, who has escaped the dungeon, provides Derek with a single arrow. Derek catches and fires the arrow into Rothbart's heart. As Rothbart falls, Pikatwo finishes him off with a powerful Thunder attack, wearing him out. Hubie, Marina and their friends tend to Pikatwo and Derek finally confesses to Odette that he loves her for her kindness and courage, and he always had. Odette returns to life, the spell on her broken. The two are married and live happily ever after.
Puffin, Jean-Bob and Speed bid Hubie and his friend goodbye and sing them a song for luck.
- This film is alternate to Pooh and Ash's Adventures of The Pebble and the Penguin, due to Jean-Bob, Speed, Puffin, and Rothbart being in that film.