Acclaimed anime master Hayao Miyazaki returns for his ninth animated feature with Ponyo, which deals with a friendship between a five-year-old boy and a goldfish princess who yearns to be human. The daughter of the king of the ocean, Ponyo is no ordinary goldfish — she has all the magic of the sea at her disposal. But when five-year-old Sosuke befriends the spunky little fish near the seaside home he shares with his mother and father, a special connection sparks between the two children, and Ponyo becomes determined to become human. Transforming into a little girl, Ponyo shows up at Sosuke’s doorstep, delighted to make herself at home with her new land-dwelling family. But having a magical fish princess walking around on dry land begins setting the mystical balance of the world off kilter, and even though the innocent love Ponyo feels for her dear friend is strong, it will take some help from the greatest powers in the ocean to make things right again.
Brunhilde (later “Ponyo”) is a fish-girl who lives in an aquarium in her father Fujimoto’s underwater castle with numerous smaller sisters. One day, when her father takes her and her siblings on an outing in his four-flippered submarine, Brunhilde is driven by a desire to see even more of the world and floats away on the back of a jellyfish. She ends up stranded on the shore of a small fishing town and is rescued by a boy named Sōsuke, who cuts his finger in the process. She licks his wound when he picks her up, and the wound heals almost instantly. After taking a great liking to her, Sōsuke names her Ponyo and promises to protect her forever. Meanwhile, Fujimoto is looking for his daughter. Upset that she ran away, he believes the humans have now kidnapped her, and he calls his wave spirits to return Ponyo to him. After the wave spirits take Ponyo away, Sōsuke is heartbroken and goes home with his mother, Lisa, who tries to cheer him up to no avail.
Ponyo and Fujimoto have a confrontation, during which Ponyo refuses to let her father call her by her birthname, “Brunhilde.” She declares her name to be Ponyo and voices her desire to become human, because she has started to fall in love with Sōsuke. Suddenly she starts to grow legs and turn into a human, a consequence of the human blood she swallowed when she licked Sōsuke’s finger. Her father turns her back with difficulty and goes to summon Ponyo’s mother, Granmamare. Meanwhile, Ponyo, with the help of her sisters, breaks away from her father and releases his magic to make herself human. The huge amount of magic released into the ocean causes an imbalance in the world, resulting in a huge tsunami. Riding on the waves of the storm, Ponyo goes back to visit Sōsuke. Lisa, Sōsuke, and Ponyo wait out the storm at Sōsuke’s house, and the next morning Lisa leaves to check up on the residents of the nursing home where she works.
Granmamare arrives at Fujimoto’s submarine. On her way there, Sōsuke’s father has seen and recognized her as the Goddess of Mercy. Fujimoto notices the moon has come out of its orbit and satellites are falling like shooting stars. Granmamare declares that if Sōsuke can pass a test, Ponyo can live as a human and the world order will be restored. If he fails, Ponyo will turn into sea foam. Sōsuke and Ponyo wake up to find that most of the land around the house has been covered by the ocean. Lisa has not come home yet, so with the help of Ponyo’s magic, they make Sōsuke’s toy boat life-size and set out to find Lisa.
While traveling they see prehistoric fish swimming beneath them. After landing and finding Lisa’s empty car, Ponyo and Sōsuke go through a tunnel. There Ponyo loses her human form and reverts into a fish. Sōsuke and Ponyo are taken by Fujimoto into the ocean and down to the protected nursing home where they are reunited with Lisa and meet Granmamare, both of whom have just had a long private conversation. Granmamare asks Sōsuke if he can love Ponyo whether she is a fish or human. Sōsuke replies that he “loves all the Ponyos.” Granmamare then allows Ponyo to become human once Sōsuke kisses her on the surface. The film ends with Ponyo jumping up and kissing Sosuke, transforming into a little girl in mid-air.