Three fifteen-year-old girls—Emma Gilbert, Rikki Chadwick, and Cleo Sertori—find themselves stranded out at sea in a dinghy, and drift onto the beaches of Mako Island. Once there, they discover a hidden, underground cavern, and inside it, a deep pool of water, sitting within the cone of a volcano. Realising that the pool, which has an underwater tunnel connected to the ocean, is their only way out, the girls step into the water and find themselves bathed in the light of the full moon as it passes over the top of the volcano. Little do they know, as they swim out of the tunnel and are rescued by the water police, that they have undergone a magical transformation, and their lives will never be the same again. Ten seconds after they touch water, they turn into mermaids. Cleo and Emma discover that they have powers to control water.
While Rikki enjoys her new life as a mermaid, Emma and Cleo are less enthusiastic about their mermaid powers. Emma's swimming career is in jeopardy, and Cleo feels isolated when she realises that she can't go to fashionable Miriam's pool party. Rikki soon gets fed up with their moaning, storms off and accidentally discovers a power of her own. Meanwhile, Cleo wants to tell her friend, Lewis, about her powers, but Emma and Rikki forbid it. However, Cleo might need his help after all when she takes a risk and attends Miriam's pool party, only to get thrown in the pool by prankster Zane Bennett and his pal Nate, just as Lewis arrives. Lewis discovers that the girls are mermaids but promises to keep their secret.
Emma and Rikki use their new-found abilities to free hatchling sea turtles caught in fishing nets. But when they shred one of the nets with a knife, they spark stories of sharks patrolling the waters. Meanwhile, Emma and Rikki have bad news for Cleo; the fishing boat that caught the turtle in its net was her father's. Refusing to believe that her father is illegally catching turtles, Cleo swims after his boat to investigate and at last accepts what she is. But the fishermen on board the boat mistake Cleo for a shark and catch her in their net. Emma and Rikki rescue her and Cleo is no longer afraid to swim in the water.
A worried Emma cancels her annual sleepover party when she realises the risk of growing a tail in front of all her guests. She and Lewis travel back to Mako Island to try to find out how the girls were transformed into mermaids, and Emma finds a mysterious locket at the bottom of the Moon Pool, and thinks that it may be important. Meanwhile, Cleo gets a job at the marine park's dolphin tank, and Emma is furious with her for taking such risks around water. But Cleo's determination to lead a normal life without being scared of every drop of water she sees convinces Emma, who reschedules her sleepover. But there is trouble in store when Miriam, upset that she wasn't invited to Emma's party, gate crashes with Zane. At the party, Cleo gets water on herself, and has to hide in a closet, but when the other girls at the party open the door, she has already managed to zip herself up inside a sleeping bag. The girls, however, almost feel Cleo's tail, and she has to use her power to blow up the drinks as a distraction. Jealous Miriam then tries to steal Emma's locket, but Rikki stops her, and gives it back to Emma. Emma then gives it to Cleo, saying that a mermaid who can hide her tail in the middle of a party is more than capable of taking care of so important a locket. Also, Cleo is confused when she is approached at the marine park by a strange old woman who seems to know her secret.
Cleo's secret diary falls into the hands of her younger sister, Kim. Kim grows suspicious when she reads in the diary that Cleo and her friends are mermaids, and shares her ideas with Emma's brother, Elliot. At first, Elliot doesn't believe her; but when Emma accidentally freezes his shower, Elliot becomes convinced that his sister is part of an evil mermaid cult. To put the kids off the scent, the girls decide to make them think that the diary is about someone else, and choose Miriam as their decoy, using their powers to make it look as though Miriam has powers of her own. Meanwhile, an oblivious Miriam enters the Miss Sea Queen pageant, and taunts Cleo, who decides to enter the pageant herself – unaware that Kim and Elliot are planning to shower the stage with water to expose Miriam and Cleo as mermaids. Lewis goes to Mako Island to investigate the moon pool in order to find out how the girls became mermaids.
When Rikki saves Emma's brother Elliot from drowning, he develops a crush on her, and won't leave her alone. With Rikki getting annoyed, Emma and Cleo try to persuade her to let Elliot down gently; but with Rikki's fiery nature, that doesn't work too well, and an upset Elliot runs away. Rikki finds him at Lewis' brother's nursery plant school and apologises. However, they end up locked in and Rikki discovers that the sprinklers will wash the plants. The others must get them out before Rikki is transformed.
The strange old woman makes a reappearance at the marine park, and gives Cleo a mysterious warning not to look at the full moon. The other girls, however, are convinced the old woman is crazy, and ignore the warning, going ahead with Emma's planned surprise party for her father. At the party, however, Emma sees the reflection of the full moon in a bowl of punch, and then starts acting very strange, losing her inhibitions and being rude to the guests. Cleo, Rikki and Lewis try to keep her under control, but Emma ends up diving into the water, and turning into a mermaid. Worse still, when the others dry her off, her tail won't go away. How can they hide a mermaid in the middle of a party?
Lewis gets a job as a lab assistant for Dr. Linda Denman, a beautiful marine biologist, and secretly plans to use her equipment to try to find out more about the girls' mermaid transformation. But he instead ends up putting their secret in danger, when he leaves a DNA sample from Cleo behind in the lab, and Dr. Denman discovers it. The girls realise that they are really in trouble when Cleo sneaks into Dr. Denman's lab, and discovers a scientific article on Dr. Denman's laptop about her unusual cell sample. With Lewis refusing to believe that Dr. Denman stole the cell sample from him (partly because he has a crush on her), Emma, Rikki and Cleo's secret could be about to be exposed to the world.
When one of Cleo's beloved fish dies, Rikki can't understand why she is so upset, and ends up offending her. To make up for it, Rikki uses her mermaid abilities to dive where no fish collector can dive, and picks Cleo a replacement fish. Back on dry land, however, she meets a man claiming to be a Marine Park breeder of rare fish, who offers to pay her good money for more rare fish specimens. Rikki takes the job, but when she sees one of the fish she caught in a pet tank in the JuiceNet cafe, she realises that the man who hired her does not really work for the Marine Park, and is actually selling the fish illegally for high profit. Rikki takes it upon herself to find the man, and deliver him to the police.
Lewis and the girls enter a short film contest held at the JuiceNet cafe, but Lewis, last year's champion, is fresh out of ideas. Rikki and Cleo are roped into doing a film about Emma's mother, but Rikki, thinking that the film is boring, sneaks off to shoot her own film, featuring some impressive underwater footage of sharks. Meanwhile, Zane, ineligible to compete himself, as his father is on the judging panel, recruits Lewis to shoot a film of him windsurfing around Mako Island, recreating (and hopefully beating), his father's windsurfing record of several years before. But things don't go to plan, when Zane falls off his windsurfer, right in the middle of Mako Island's shark breeding ground.
Emma is flattered when local surfing hero, Byron, asks her to train him up for a swimming competition, but has to turn him down for obvious reasons. However, she changes her mind after learning that Zane is boasting to everyone that he will beat Byron by a mile, and begins training Byron without getting in the pool herself. But Byron is disappointed when Emma turns into a ‘heavy training dragon', and the pair nearly fall out. Emma takes advice from her friends not to be so hard on Byron, but by being nice to him, she gives him the wrong idea, and they end up kissing. Meanwhile, Lewis continues his research on the girls, but Rikki does not like him treating her as a specimen, and tries to annoy him by disrupting his experiments.
As another full moon approaches, Rikki pushes Cleo into a karaoke contest at the JuiceNet cafe, not realising that Cleo cannot sing. After embarrassing herself in front of everybody listening, Cleo heads back home with Emma, Rikki and Lewis to prepare for the full moon. But despite all their preparations, Cleo glimpses the moon in the reflection of some water in the bathroom sink, but when she touches the water, she doesn't turn into a mermaid. Cleo then stands before everyone in the house, and, to Rikki and Emma's surprise, sings with the most beautiful voice imaginable. Lewis realises that the full moon has turned Cleo into a siren – a mythological mermaid that used its mesmerising voice to lure sailors to their deaths. Cleo's voice, however, seems to be luring hundreds of teenage boys to her house, and under the spell of her voice, Lewis kisses her, and is thrown out by her father. It is then up to Emma and Rikki to keep Cleo out of trouble until the moon sinks; but, while they both sleep, Cleo phones up the local radio station, and gets her voice on the radio.
At the local boat yard, Emma finally meets the mysterious old woman who has been following Cleo around; Miss Chatham. And she finds her at just the right time, as Miss Chatham has an argument with Zane about an accident involving her houseboat ("Lorelei") and his jet ski, and then collapses from a heart attack. As she is taken away in an ambulance, Zane hears her muttering to Emma that she needs to protect her ‘treasure'. Later, Emma invites the fragile Miss Chatham to stay with her, and she, Cleo and Rikki get to know her better. But upon hearing that she has been evicted from the boat yard, Miss Chatham sets off in the Lorelei before it can be taken away from her but she accidentally damages Zane's Jet Ski. Zane chases after her in his Zodiac pontoon boat, catches up with the Lorelei near Mako Island, and boards the Lorelei. He demands compensation for his damaged jet ski, but Miss Chatham passes out with another heart attack. Emma and Lewis arrive just in time to help Miss Chatham and take her to seek medical care on Lewis' boat. Zane stays aboard the Lorelei, searching for the treasure. Kerosene from a lamp ignites on the Lorelei's engine, and the boat begins to sink, trapping Zane. Emma is forced to dive down to the sinking boat in order to save Zane, and risks him discovering that she is a mermaid, but he just glimpses her tail before he passes out. Emma returns Miss Chatham's "treasure" to her, and it turns out to be a locket (identical to Cleo's), containing a picture of three teenage girls; herself and her friends Julia and Gracie, who were all mermaids back in the 1950s (Cleo's locket belonged to Miss Chatham's friend Gracie).
Cleo counts down the days to her sixteenth birthday, not with excitement, but with dread. Emma and Rikki can't understand Cleo's mood, until Lewis tells them about Cleo's father's embarrassing birthday parties. Meanwhile, Zane is determined to find the "sea monster" that saved him from drowning, and recruits Lewis to help him. But Lewis has promised the girls that he will keep Zane as far away from Mako Island and them as possible.
Emma is excelling at her new job at the JuiceNet café, and is delighted when Wilfred puts her in charge for a whole weekend. However, her skills and patience are put to the test when Cleo persuades her to hire slacker Rikki, who needs the money for concert tickets. But with Emma being a megalomaniac manager, and Rikki a lazy employee, things don't work out, and Rikki quits after Emma gives her a hard time for being rude to demanding customer Miriam. While the girls argue, the scheming Miriam sneaks into the JuiceNet's Cool Room, and turns up the temperature, in an attempt to get Rikki and Emma fired. Emma soon discovers that things in the Cool Room are thawing out, and uses her power to re-freeze them – but accidentally freezes Miriam at the same time.
Zane is relentlessly carrying on with his search for the mystery sea monster that saved his life, and tricks Cleo into giving him access to the marine park's library, so that he can learn more about sea creatures. Meanwhile, Cleo's friends and family become convinced that she has a secret boyfriend when she starts making odd phone calls and sneaking out of the house... unaware that she is only going to the marine park to care for a sick dolphin that seems to have a ‘crush' on her.
The girls are left housebound on the day of a big biology exam by a sudden rain storm. To keep Emma's mother from getting suspicious, the girls use their powers to fake illness (Rikki gives them high temperatures and red blotches on their skin, before Emma gives them low temperatures), but their plan backfires when Emma's mother calls a doctor, who is convinced that the girls have a rare tropical disease, and wants to send them to a hospital. Knowing that they would not last five minutes in the hospital without someone discovering their secret, the girls must try to think a way out of their elaborate lie... without getting into trouble with their families.
Haunted by his experience with the "sea monster", Zane presses on with his investigations, and is soon led to Mako Island. Meanwhile, on the night of another full moon, it is Rikki's turn to be moonstruck, when she glimpses the moon's reflection in a glass of water, and undergoes a catastrophic change; she loses control of her ability to heat water, and begins boiling everything around her. Distraught, Rikki runs away to Mako Island, and bumps into Zane. Feeling alone and frightened, she kisses him, but ends up hurting him with her power. Emma, Cleo and Lewis seek Miss Chatham's help.
When Cleo's young cousin Angela comes to stay, Cleo's father gives Cleo the responsibility of taking care of her, hoping it will distract Cleo from arguing with her sister Kim. But taking care of Angela brings on challenges of its own, as it appears she is a spoiled brat, who is determined to get what she wants, and, worst of all, has a fondness for water. Rather than taking Angela to the beach to go body boarding, Cleo instead takes her to the safety of the marine park to look at the pelicans Kim is so fond of. But things soon turn bad, when Angela goes missing, and Cleo and the others find a pelican in her house, which Cleo accuses Kim of stealing from the marine park. The real thief turns out to be Angela, who used the pelican as a distraction so that she could go body boarding as punishment Cleo makes Angela clean up after the pelicans at the marine park.
Keen angler Lewis enters the annual fishing derby with a secret weapon; a specially designed lure, that is actually hopeless at catching fish. With Nate and the rest of the contestants laughing at him, Cleo feels sorry for Lewis, and tries to help him by deliberately putting a huge fish on the end of his line. But her plan backfires when it is revealed that the fish she chose was a deep-sea tuna, a fish impossible to catch with an ordinary fishing rod from the shore. Lewis is accused of cheating, and is kicked out of the competition, leaving Cleo feeling guilty. Meanwhile, Rikki visits an art exhibition, and has an awkward meeting with Zane. But the pair are forced to talk to each other when they get trapped on a balcony.
When Byron makes an innocent comment about Emma being dependable, she misunderstands, and thinks he is saying she is boring. Deciding she needs a change, Emma asks Cleo to dye her hair, but is horrified when Cleo accidentally dyes it a bright red. However, the girls discover that, as Emma was a mermaid when she dyed her hair (as dyeing hair involves water), her hair only becomes red when she has her tail. Meanwhile, Zane's investigations into his sea monster mystery lead him to Miss Chatham, and he becomes convinced that she knows something. At first, the girls are unconcerned, as Zane has no evidence that Miss Chatham knows anything; but when they discover that Zane is planning to dive down to Miss Chatham's wrecked houseboat, Miss Chatham tells them of some old photographs of her and her mermaid friends, locked in a metal chest on board. Emma chooses to swim out to the wreck to salvage the photographs, before Zane finds them. But as she swims out of the wreck, Zane sees her (but luckily doesn't recognise her because of her red hair). When the girls find out that Zane now knows about mermaids, Rikki tracks Zane down and says she will be his girlfriend, provided he stops his mermaid hunt. She also warns him not to tell Emma or Cleo about them.
Emma and Cleo are suspicious of Rikki when they see her apparently out on a date with Zane. After her friends pester her about it, Rikki finally confesses that she and Zane are going out, and Emma and Cleo, fearing that Rikki will tell Zane their secret, tell her to dump him. Rikki refuses, and she and the others fall out; but when Zane's father unveils plans to turn Mako Island into a holiday resort, and Zane fails to stand up to him, Rikki begins to wonder whether she made the wrong choice.
Rikki is amazed when she sees a locket in a jeweller's shop identical to Cleo's and Miss Chatham's. Miss Chatham reveals that the locket belonged to her friend Julia, the third original mermaid, and Rikki and the others begin searching for the money to buy it for her. But Zane makes a mistake when he lets slip to ex-girlfriend Miriam that Rikki was looking at the locket, and Miriam buys it just to spite her. But another problem comes to the girls' attention when Miss Chatham tells the story of how Julia – a girl with a fiery nature identical to Rikki's – trusted her wealthy boyfriend with her mermaid secret, only to have him betray her. She and the girls are worried that Rikki will make the same mistake of having too much trust in Zane, but when Zane retrieves the locket for Rikki after Miriam throws it in the water, they are relieved to see that she carefully dries the locket before touching it, meaning that she is not willing to share her secret with Zane. The girls give Julia's locket to Miss Chatham, but she gives it to Rikki, and then gives her own locket to Emma, saying that it is right that they are all together.
With the school's end of year dance approaching, Emma takes up the stressful job of heading up the dance committee. But, while the tough task of organising the dance is bad enough on her nerves, she is also flattened by the news that Byron, who she was hoping would ask her to the dance, is already going with Ice Queen Miriam. Cleo is also disappointed that Lewis is too caught up in his experiments to ask her to the dance, and, rather than go alone, she is forced to ask Nate. The only upside is that Lewis, after days of research and testing, has come up with a formula to make the girls' skin waterproof, and they no longer have to worry about getting wet. But, as the wise Miss Chatham declares, science and magic cannot mix, and Lewis' formula gives the girls an allergic reaction where their skin turns red, and they are forced to flee the dance. Things turn out well in the end, however, as Cleo finally admits to Lewis how she feels about him, and they become a couple.
Emma is forced to drop out of her family's annual holiday to a water park resort, which upsets her parents and annoys her little brother. But she and the other girls have much more to worry about, when Lewis and Cleo spot their old enemy Dr. Denman's boat anchored near Mako Island. Returning to follow up her discovery of cells that mutate on contact with water (a DNA sample from Cleo that Lewis accidentally left behind in her lab), Dr. Denman and her team of divers investigate Mako Island, and soon discover the Moon Pool – and what is worse, they also find a scale from one of the mermaids' tails. After performing some tests on the scale, Dr. Denman sees that it is identical to the cell sample she stole from Lewis, and realises that he is strongly connected to the whole thing. But she gets even closer to the girls' secret when she meets Zane, and hears his story of the mermaid he saw. At first, Dr. Denman doesn't believe a word Zane says; but when her underwater cameras set up around the entrance to the Moon Pool capture images of Emma, Rikki and Cleo, she and Zane's wealthy father team up to capture the mermaids (although they decide not to tell Zane that one of the mermaids is actually Rikki).
Now that the mermaids have been identified, Dr. Denman continues her pursuit of them by holding Lewis hostage on her boat and using his mobile phone to lure the girls to the Moon Pool, where she traps them. After discovering that the three mermaids are in fact Rikki and her friends, Zane is left torn about where his loyalties lie; with his father, or with Rikki. Eventually, his conscience leads him to set Lewis and the girls free (much to his father and Dr. Denman's annoyance), but the mermaids are not out of trouble yet. Knowing that Dr. Denman and the scientists will still come after them, the girls must make a tough decision. Miss Chatham tells them of the forthcoming lunar eclipse, and says that, if they enter the Moon Pool when the eclipse passes over it, it will draw their powers away from them. As normal girls, the three of them would be of no interest to the scientists, and would be out of danger. The girls make the choice to enter the pool, and while their powers seem to vanish completely, the next morning they find they've become mermaids again: the eclipse only affected them for 12 hours.