In the summer of 1959, shy young sea monster Luca Paguro herds goats off the coast of the Italian town of Portorosso. His parents Daniela and Lorenzo, fearing that humans might hunt him, forbid him from approaching the surface.
One day, Luca meets Alberto Scorfano, a fellow sea monster child who lives alone on the surface, claiming that his father is simply not around. Alberto encourages Luca to come out of the ocean, showing him that sea monsters turn into humans when dry, but return to their true forms when wet.
Luca follows Alberto to his hideout in Isola del Mar, where the boys bond by making and riding a makeshift fragile Vespa.
Upon learning of their son’s actions, Luka’s parents plan to send Luka to live in the deep sea with their uncle Hugo. In revenge, Luca runs off with Alberto to Portorosso to find the real Vespa and travel the world.
The boys come into conflict with Ercole Visconti, a local bully and five-time champion of the Portorosso Cup, the local children’s triathlon. Ercole tries to dip Luca into the fountain, but Giulia Marcovaldo, a young girl, helps the boys escape.
Hoping to win the money needed for the Vespa, the boys and Julia form a triathlon team that includes swimming, pasta eating, and cycling.
Unable to swim without revealing themselves, Luca and Alberto take over cycling and eating pasta respectively, with Giulia taking over the swimming.
Upon learning of this, Ercole vows to defeat them and continue his winning streak.
As the boys prepare for the race and befriend Giulia Massimo’s fisherman father, who was born with one arm, Luca’s parents travel to the surface to find their son. Julia teaches Luca at school and they share a love of learning, especially astronomy.
Alberto is jealous of Luca and Giulia’s growing friendship. When Luca starts ignoring Alberto’s advice and tries to change his plans to go to school instead of traveling the world, he and Alberto fall out. In anger, Alberto deliberately reveals his true form to Julia.
Unable to give up, Luke pretends to be surprised by the transformation. Heartbroken and betrayed, Alberto returns to his hideout. Later, Julia splashes a cup of water on a panicking Luca; seeing his true identity, she sends him away for his own safety.
Luca tries to reconcile with Alberto and discovers that Alberto’s father suddenly abandoned him a long time ago, making Alberto think he is to blame and shouldn’t have friends. When Alberto refuses to cooperate, Luca sets out to single-handedly win a Vespa to set things right.
After several setbacks, Luka takes the lead in the bike race, but is forced to take cover when it starts to rain. Alberto appears with an umbrella, but Ercole throws it away, and both boys appear as sea monsters. They flee from Ercole, who now intends to kill them and collect the money for the bounty, but Julia helps them by crashing her bike into Ercole’s, injuring herself in the process.
Luca and Alberto return to help her, finally confronting Ercole. They are protected from Ercole and other fishermen by Massimo, who reveals that the boys are his friends. He also notes that they crossed the finish line and won the race.
Other sea monsters in disguise appear, including Luca’s family, and the townspeople greet them. When Ercole refuses to accept the substitution, he is thrown into the fountain by Ciccio and Guido’s own henchmen, fed up with insults and insults.
Luca and Alberto buy a Vespa, but Alberto sells it to buy a train ticket for Luca, allowing him to go to school in Genoa with Giulia. Luca’s family, Massimo, and Alberto see Luca and Giulia off at the train station, where they all promise to stay in touch.
During the credits, Luka meets Julia’s mother and goes to school, showing off his sea monster appearance, and later watches the Apollo 11 moon landing on TV with Julia.
Massimo becomes Alberto’s adoptive father, and Alberto and Luca’s family enjoys interacting with the people of Portorosso.In the post-credits scene, Hugo talks to the lost goat about how wonderful his life is in the depths of the sea.