Fly is an impulsive 12-year-old boy living with his younger sister Stella and their parents Lisa and Bill. When their parents go out for the night, Fly and Stella are babysat by their aunt Anna and her son Chuck, a cautious, overweight genetics prodigy, and Fly and Stella's cousin. When Anna falls asleep, the children sneak out to go fishing. Caught in a high tide, they stumble across the boathouse of Professor Mac Krill, an eccentric but kindly marine biologist. Reasoning that climate change will melt the polar icecaps to produce marine transgression within the next century, MacKrill reveals he has developed a potion to transform humans into marine animals, along with an antidote to reverse the process.
Mistaking it for lemonade, Stella drinks the potion and turns into a starfish, which Fly unknowingly throws out the window into the sea. Chuck discovers the mistake after finding Stella's transformation caught on camera. The trio set out to find Stella, but their boat sinks in a storm. Fly and Chuck drink the potion, becoming a California flying fish and a moon jellyfish. Bill and Lisa return home to find Anna frantic with worry. Noticing that Fly's fishing equipment is gone, Bill, Lisa, and Anna head to the beach to search for them but find only Fly's rollerblades. The adults fear the worst until Professor MacKrill, having survived the storm, arrives and shows them the video of Stella's transformation.
Underwater, the leaking antidote attracts a lemon shark and a pilot fish. They consume it, gaining intelligence and anthropomorphic appearances. The pilot fish names himself Joe and uses the antidote to create a civilisation of intelligent fish, intending to launch a revolution against humanity, whilst Shark becomes his dim-witted subordinate. The trio—Fly, Chuck, and Stella—are soon joined by Sasha, a seahorse whom Stella adopts, and they swim with a newfound sense of purpose. They must find the antidote within forty-eight hours, or their transformations will be permanent.
The children swim to Joe's domain, a sunken oil tanker, where Fly tries to steal the antidote. They are caught and interrogated by Joe about their intent and origins. He demands that they manufacture more of the antidote, or the Shark will eat them. The children are imprisoned and guarded by an aggressive, militaristic King Crab. Sasha frees the children, who manage to escape.
The kids decide their only hope to become human again is to duplicate the antidote's formula, gathering ingredients from around the ocean. Just as they complete the potion, Joe and his army appear and corner them. In a stand-off, Joe drinks the last of the original antidote, transforming his fins into hands. The children try to escape, but Fly is wounded by the crab, who drinks the new antidote and declares himself King Crab. At the same time, MacKrill and Bill pass over in a makeshift boat powered by a water pump. The pump causes an underwater typhoon, sucking up the army. The Shark eats the King Crab but is incapacitated when he is sucked head-first into the pump.
Chuck remembers that MacKrill has another vial of the antidote in his laboratory. Formulating a plan, Chuck plans to carry Fly and Stella through dangerous seawater intake pipes back to the lab. However, Stella has to leave Sasha behind as the journey could kill her. The children flood MacKrill's laboratory to reach the potion, but Joe follows, stealing it. Fly pursues Joe into the pipes, tricking him into repeatedly drinking from the potion by challenging his intellect, causing Joe to eventually mutate into a deformed humanoid and drown.
Fly drags the antidote back into the lab, Chuck uncorking it just as Lisa and Anna open the door to the flooded lab. Chuck and Stella become human once more, reuniting with their parents and MacKrill. After a few tense moments in which a stuffed fish is mistaken for Fly's body, the human Fly emerges from one of the lab's pipes with a broken leg. Some time afterwards, the family and MacKrill spend some time together on the beach. Sasha appears, so Chuck and MacKrill transform her into an actual horse, who Stella rides around joyfully.
