The film begins on a foggy morning out on the open sea. A ship then comes from the fog, filled with sailors singing stories of the legendary merfolk. ("Fathoms Below") Aboard that ship is a young princess, named Erica, her dog Max, and her advisor Grimsba, who denounces the merfolk as, "nautical nonsense," but one sailor insists them to be real. While distracted by Grimsba, a fish the sailor was holding slips from her and falls into the ocean.
The fish breathes a sigh of relief before swimming away from the ship. The opening credits play as the fish crosses the deep ocean until at last, we see merfolk. They then make their way through the ocean towards a shining underwater castle. The castle is the domain of Queen Mermaid and is where she was holding a concert in her name, performed by her seven sons and the crab court composer, Sylvia. ("Sons of Mermaid")
The concert goes as planned until it is discovered that Mermaid's youngest son, Artie, is not there, much to her chagrin. In truth, Artie was out excavating a ship graveyard with his best friend, Flounder the Fish. Inside one wreck, he finds a pipe and a fork, which fascinates his curiosity, all the while unaware of a shark watching him and Flounder from outside.
