Plot
Brunhilde is a fish-girl who lives with her father Fujimoto, a once-human wizard who now lives underwater, and her numerous smaller sisters. One day, while she and her siblings are on an outing with their father 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. After an encounter with a fishing trawler (which is being used to clean up the trash-strewn bottom of the harbour), she ends up stuck in a bottle. She drifts to the shore of a small fishing town and is found and rescued by a small boy named Sōsuke. He cuts his finger in the process, but Brunhilde licks his wound when he picks her up, and the wound heals almost instantly. After taking a great liking to her, Sōsuke renames her Ponyo and promises to protect her forever. Meanwhile, a distraught Fujimoto is searching frantically for his daughter. Because of his own bad memories of the human world, he believes that Sōsuke has kidnapped her, and he calls his wave spirits to recover her. 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 power granted to her by the human blood she ingested 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 uses his magic to make herself fully human. The huge amount of magic that she inadvertently releases into the ocean causes an imbalance in the world, resulting in a huge tsunami. Running pell-mell over the waves of the storm, Ponyo goes back to visit Sōsuke, who is amazed but overjoyed to see her. Lisa is equally amazed, but takes Ponyo's transformation in stride. Lisa, Sōsuke, and Ponyo wait out the storm at Sōsuke's house, where Ponyo learns of some of the things in the human world. Worried about the residents of the nursing home where she works, Lisa leaves to check up on them, promising Sōsuke that she will return as soon as possible.
Granmamare arrives at Fujimoto's submarine. On her way there, Sōsuke's father sees and recognizes her as the Goddess of Mercy. Fujimoto notices the moon appears to be falling out of its orbit and satellites are falling like shooting stars, symptoms of the dangerous imbalance of nature that now exists. Granmamare declares that if Sōsuke can pass a test, Ponyo can live as a human and the world order will be restored. A still-worried Fujimoto reminds her that if Sōsuke fails the test, 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. Since it is impossible for Lisa to come home, the two children decide to find her. With the help of Ponyo's magic, they make Sōsuke's toy boat life-size and set out across the ocean.
Over the course of their journey, they see prehistoric fish swimming beneath them, and encounter several other evacuees in boats. After landing and finding Lisa's empty car, Ponyo and Sōsuke head into a tunnel. There Ponyo loses her human form and reverts into a fish from using too much of her magical power to help Sōsuke and others along the way. Meanwhile, Lisa and the residents of the nursing home are below the surface, but have been temporarily given the power to breathe underwater. Sōsuke and Ponyo encounter Fujimoto, but Sōsuke doesn't trust him and attempts to flee. However, Fujimoto captures them and takes them down to the protected nursing home. Sōsuke is reunited with Lisa and meets Granmamare, with whom Lisa has 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 tells her daughter that if she chooses to become human once and for all, she will have to give up her magical powers. Ponyo agrees to this, so Granmamare encases her in a bubble and gives her to Sōsuke, and tells him that kissing the bubble will complete Ponyo's transformation. The balance of nature is then restored, and the previously stranded ships head back to port, including Sōsuke's father's. Ponyo jumps high in the air and kisses Sōsuke, transforming back into a human.
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