A young reporter and his niece discover a beautiful and enchanting creature they believe to be the real little mermaid.
Eloise tells her two granddaughters a unique version of The Little Mermaid. In her tale, a mermaid princess is tricked by a wizard who steals her soul, condemning her to an eternity of enslavement far from the ocean. When the girls dismiss the story as mere fiction, Eloise begins a new tale about a girl she once knew who encountered a real mermaid.
Cam, a young journalist, pens a letter while keeping an eye on his niece, Elle, who suffers from an undiagnosed, incurable condition. When Elle begins coughing, Cam carries her inside, worried for her fragile health. Shortly after, his boss assigns him to investigate a circus act in Mississippi. The performer, a man named Locke, claims to possess "mermaid healing water." Skeptical but desperate for Elle's sake, Cam decides to investigate, hoping the water could be a cure.
At the circus, Cam and Elle are stunned to see a mermaid confined in a glass tank. The next day, Cam interviews several people who have used Locke's so-called healing water, only to find none of them were truly cured. Convinced the water is a fraud, Cam assumes the mermaid is also part of the con.
While walking in the woods, Cam and Elle encounter the mermaid again, now with legs. She introduces herself as Elizabeth and explains that her legs appear during low tide. Before they can talk further, Elizabeth abruptly departs, compelled to return to the circus. Cam becomes suspicious and sneaks back to the circus, where he overhears Locke and his henchman, Sid, discussing Elizabeth's imprisonment. Locke holds a vial containing Elizabeth's soul, preventing her escape.
Cam follows Elizabeth's singing to her tent, but Locke catches him and forces him to leave. Later, Locke kidnaps Elle, revealing that she has the rare "heart of a mermaid," which he plans to exploit in his scams.
With the help of Thora, a fortune teller with magical abilities, and Ulysses, a strongman who is a skilled fighter, Cam sets out to rescue Elle. Together, they retrieve Elizabeth's soul and free her from her tank. Locke discovers their plan and pursues them, revealing his own magical powers. During the escape, Thora and Ulysses admit they, too, were victims of Locke's deceit, forced into his circus through trickery.
The group makes their way to the ocean, battling Locke and Sid along the way. With Locke defeated, Elizabeth regains her soul and heals Elle. She tells Elle that, whenever she feels unwell, a swim in the ocean will help-because Elle is part mermaid. Before parting ways, Cam and Elizabeth share a bittersweet kiss, and Elizabeth returns to the sea.
Cam writes a detailed exposé about Locke's scams and cruelty, as well as the truth about Elizabeth. Though he doubts anyone will believe him, he feels it's important to tell the story.
Back in the present, Eloise finishes her tale. She begins coughing, then smiles at her granddaughters and says it's time for a swim. To their surprise, Eloise walks outside toward the water, her granddaughters trailing behind her, realizing the truth: Eloise was Elle all along.