An elderly woman reads the Little mermaid fairy-tale to two of her granddaughters, but when she reaches the end, she tells that the story isn't like she remembers it, and proceeds to tell the story.
A young girl Elle is sick, and her uncle Cameron takes care of her after her parents died in an accident. Cameron's boss heard of a magic water sold at the circus, and sent Cam to write a story about it and maybe even find a cure for Elle. Cameron takes Elle to the circus, they first go to a fortuneteller, who realizes Elle is special. Cam and Elle then see the main attraction the mermaid of Mississippi. Elle goes on the ferris wheel, and Cam notices how some men harass a woman, and steps between them. After they leave, Cam sees the girl, mermaid. The next day Cam interviews the townspeople about the magic water, and comes to a conclusion that it's a hoax. Cam also tried to interview Mr. Locke, but he doesn't want to answer any questions. While Cameron and Elle are walking in the forest, they come across the mermaid, who reveals her name to be Elizabeth, but she is summoned back by Mr. Locke, and she stops the beastman Ulysses from being beaten by the trainer. Cam snoops around the circus, and sees Locke's secret hidden inside the music organ. Cam then hears someone singing, and follows the voice. Cam find Elizabeth singing, and stumbles on something so she sees him as well. Mr. Locke however finds Cam and threatens him to leave. Cameron and Elle visit a ferry on the Mississippi. Cam decides to spend his time writing, and sees Elizabeth on the ferry. They spend some time together, and kiss. Elizabeth runs away, and Cam follows her, seeing something in the water, Cam Jumps in and sees Elizabeth as a mermaid. Elizabeth tells him story of how Mr. Locke came to own her, and Cam wants to help. In the meantime Elle is kidnapped by the animal trainer under order by Mr. Locke. Cameron goes to the circus and the fortuneteller comes to his aid, leading him to Elle. The fortuneteller reveals that Mr. Locke holds Elizabeth's soul, and Cam realizes that's the thing hidden in the music instrument. Ulysses also join their escape and they release Elizabeth from the tank, after the fortuneteller stops time in the circus tent. They all then hop a train heading towards the ocean, and Cameron gives Elizabeth the vial containing her soul. Mr. Locke stops the train, and the group is forced to abandon it and take a truck nearby. Cameron realizes that they left Elle's medicine in the train, but Elle urges them to continue without it. Ulysses stays behind to stop anyone who follows. The truck gets stuck and Cameron is forced to carry Elizabeth to the water, that's nearby. Mr. Locke however defeats the fortuneteller and stops them from reaching the ocean. During the fight Elizabeth uses her soul to power the fortuneteller, and with the help of Elle's belief they defeat Mr. Locke. Cameron then takes Elizabeth to the water, and she is rejoined with her soul, healing her. Elizabeth also heals Elle in the water, and tells that when she is feeling sick, all she needs is a swim. Elizabeth then returns to her family.
The grandmother is revealed to be Elle, and after the story she feels a bit sick and goes for a swim, and her granddaughters see her transforming into a mermaid.