The film starts with the voice of the Queen of Krakens (Jane Fonda) saying that while humans have always tried to explore the mysteries of the underwater world, there are certain misconceptions that they have. For instance, krakens aren't monstrous ship-destroyers, but mighty warriors.In the town of Oceanside, Ruby Gillman (Lana Condor) is a young kraken living on the surface world with her parents Agatha (Toni Collette) and Arthur (Colman Domingo), plus little brother Sam (Blue Chapman) and pet squid Nessie. Agatha is a real estate agent while Arthur runs an ASMR channel for people who like making ships in a bottle. Ruby's best friends are Margot (Liza Koshy), Bliss (Ramona Young), and Trevin (Eduardo Franco). They are all set to go to prom, which will be held on a boat, but because Agatha forbids Ruby from going near the water, she and her friends have missed out on many events.Ruby fails to convince Agatha to let her go to prom but still decides to take a chance to ask out her crush, Connor (Jaboukie Young-White), whom she is tutoring in math. Ruby's friends give her a confetti cannon to use as a promposal for Connor, but before she can use it, he says people should simply ask one another. He then sees the confetti cannon and takes it from Ruby, only to blast himself in the face with confetti that makes him slip on his skateboard over a railing and into the water. Ruby hesitantly attempts to jump in and save Connor, and when she jumps into the water, she begins glowing purple, and a pulse goes across the ocean. After some struggle, Ruby manages to pull Connor to the surface.A crowd of onlookers surround Connor as they believe someone else saved him. The new girl in town, Chelsea Van Der Zee (Annie Murphy), starts to take credit for saving Connor. Just as Ruby tries to talk to him, her left hand starts glowing. Ruby runs to the library to try to call her mom, but she grows to a colossal size and destroys the library before running to hide.From a distance, Agatha sees her daughter's gigantic form and rushes to help her. She runs into her brother Brill (Sam Richardson), who was sent by their mom (who happens to be the Queen) to find Ruby since they felt the pulse underwater. Agatha and Brill find Ruby hiding behind a lighthouse. Agatha explains to Ruby that this is normal for them and that she shouldn't feel like a monster. Ruby shrinks back to her normal size before going back home, where Agatha tells Arthur what happened. Before Brill leaves, Ruby overhears him arguing with Agatha over keeping this a secret from Ruby.Ruby follows Brill to the water, where he spills the beans on her grandmother. She follows him underwater and grows massive again before Brill takes her to the kraken kingdom to meet the Queen, who insists Ruby call her "Grandmamah". She explains to Ruby the history of the krakens and how the mermaids are their archenemies due to a war from long ago. The mermaid Queen Narissa attempted to rule the ocean using the Trident of Oceanus, but Agatha fought back and banished the mermaids. However, instead of succeeding Grandmamah for the throne, Agatha chose to live on the surface world. When Grandmamah presents Ruby to the rest of the krakens as her successor, she panics and flees.As Ruby leaves, she falls into a trap laid out by crusty sailor Gordon Lighthouse (Will Forte), who is obsessed with catching a kraken after Ruby was spotted by onlookers earlier. Just before he attempts to blow her up, Chelsea frees Ruby, revealing herself as a mermaid. While Chelsea tries to befriend Ruby, she ends up fleeing back home.At school, everybody is talking about the kraken sighting. Ruby finds Chelsea and tries to get help with blending in with others. They go back underwater together where Chelsea shows Ruby a series of currents where the Trident is being kept. Chelsea says she wants to help the mermaids, suggesting she is Narissa's daughter and that she wants to make things right. She convinces Ruby that they can end the war between krakens and mermaids if they get the Trident back. Ruby tries to swim through the currents but keeps getting thrown back. She goes back to Grandmamah to learn how to utilize her abilities, such as swimming better and using laser eyes.While Ruby and Chelsea start to hang out more, Ruby begins neglecting her friends. Meanwhile, Gordon goes on the hunt for the kraken and asks for volunteers, so Arthur, Brill, and Sam join him and use Nessie to trick him into thinking he's caught a kraken baby.During an open house party that Agatha is throwing, Ruby tries to convince her that she and Chelsea are friends and that they can end the kraken/mermaid feud, but Agatha says Chelsea is dangerous. Ruby gets angered and grows huge again, destroying the house before going back to the ocean. Agatha follows and goes back to her mother, saying that Narissa's daughter is manipulating Ruby, until Grandmamah says Narissa never had a daughter. They realize Ruby is in trouble.Ruby manages to swim through the currents and retrieve the Trident. When she presents it to Chelsea, the mermaid reveals her true colors by saying she was always Narissa and can now take her revenge on the krakens. She grows to gigantic and begins to terrorize the waters as the prom boat is passing up above. She also leave Ruby buried under rocks until Brill comes by to free her.Grandmamah and Agatha rise to confront Narissa, while everyone on the prom boat witnesses the fight. As Narissa causes a giant wave, Ruby rises up to save her friends, revealing herself to them at last, but Margot, Bliss and Trevin think she looks cool. Ruby briefly fights Narissa before joining her mom and grandma to team up and destroy the Trident. Together, they fire their laser eyes at once to blow up the Trident, depowering Narissa and letting her get captured by Gordon.Ruby shrinks and joins the prom, apologizing to her friends for not telling them the truth, but they forgive her and think she's more awesome, as do the rest of her classmates. She and Connor then start to dance.The Gillmans become more successful and popular now that the town knows what they really are. Connor has joined Ruby's friend group now that they appear to be dating. When Ruby finds out there is more trouble underwater, she wastes no time in jumping in and going full kraken.