The film opens with a sunken ship, in which a shark is swimming; an octopus lands on its head next to a mermaid. The Merman tribe destroys another planet while looking for the Mermaid tribe.
Nobita's mother tells him to go shopping, but he plays with Gian instead. His mother asks Doraemon and her husband, but they decline. Doraemon does the shopping; on the list he sees Dorayaki, a snack which is his favorite food. Suneo shows his diving photos in Palau to Gian and Shizuka. Nobita wants to go to Suneo's house to see more pictures, but he is unwelcome and Doraemon comforts him. When Nobita wants to dive, Doraemon uses an underwater pump simulator to pump the water out of Tokyo, causing the city to submerge. That night, Doraemon and Nobita use a diving mask simulator to dive underwater.
Nobita sees a fish tail, and tells Doraemon he saw a mermaid. They take pictures, and hear a scream. The shadows of a mermaid and a shark appear. Nobita's father tells police he saw a shark swim past the cigarette store. Nobita and Doraemon ask how he could see it without his goggles, and see that the fish are still there but the water is gone. A boy, Dekisugi, looks through his telescope and sees a mermaid and a shark. Nobita looks for the shark, who is behind him. Doraemon throws a frog into the shark's mouth. The shark and other fish return to the ocean, and the mermaid falls onto a tree branch.
Nobita notices a fish tail beneath the leaves, and Doraemon finds a girl. In Nobita's room, she drinks juice and begins speaking in an unknown language; Doraemon serves his translation jelly. After thinking Doraemon is a puffer fish, she introduces herself as Sophia. Suneo says he saw a shark, and Gian explains that sharks live in the ocean. Nobita arrives with Doraemon and Sophia, and Gian and Suneo find her attractive. A car nearly hits Sophia, but Doraemon grabs her. She starts to fly high in the sky, but the sun makes her faint and dry. Doraemon puts out his anywhere door, and they go to Shizuka's bathroom. Sophia takes a bath, and Shizuka sees a tiara. Sophia allows her to put it on, after explaining that it is the royal mermaid symbol. Nobita asks Doraemon if mermaids exist, explaining that when he met Sophia she had a mermaid tail instead of legs.
Doraemon's sister, Dorami, comes through a circle and asks Nobita to draw a mermaid; his drawing makes everyone laugh. Dorami explains apparitions, legends and animals mistaken for mermaids. Shizuka tells Sophia she will wash her clothes, but Sophia tells her not to. In Dorami's bedroom, a scream is heard. When they get to the bathroom, Shizuka is a mermaid and Sophia is underwater. Doraemon copies Sophia's clothes and uses his familiar light to help them breathe underwater (where they become mermaids), using his watertight rope to keep water away. Sophia says that Doraemon has powers like the goddess Manatia, and they ask if the mermaid sword exists.
Doraemon uses his mystery ink and scroll, which says that five stars will form a pentagon. The next day, they dive to Sophia's palace. Nobita is tired, and sinks. A giant eel appears behind them; they hide in a cave until they are rescued by a puffer fish and Sophia's soldiers, who accuse Doraemon, Nobita, Gian and Suneo of kidnapping Sophia. They arrive at the home of the mermaid tribe and are put in a fish tank, expecting to be eaten by a Megaladon. Sophia tells the puffer fish to stop the punishment. They are released, and a soldier told Sophia she has been summoned by Queen Undine (queen of the mermaid tribe and Sophia's grandmother). When they arrive at the palace, Queen Undine tells Sophia that she will be queen.
Meanwhile, Nobita realizes that they left Shizuka behind. Gian and Suneo go back to try to find her. However, they can not find her and they theorize that she has been captured by the Merman tribe.
Soon, the King of the Merman tribe arrives and demands the mermaid sword in exchange for Shizuka, who was mistaken to be the mermaid princess because she was wearing the royal tiara. Doraemon creates a fake with Nobita's toy inflated sword and gives it to the mermen. They get Shizuka in return. Once the King of the Merman realize that the sword is not genuine, his troops begin to attack the mermaid castle. Sophia prays to the mermaid god, who reveals the location of the mermaid sword. However, the merman king steals the sword and uses it to wreak havoc by creating an underwater tornado. Doraemon lands in the watertight ring that they were using the day before. After he locates everybody else, he uses a surfing board to spray the merman king with a special gas, allowing him to see the simulated water.
Doraemon then lures the merman king onto an island, where it is revealed that the mermaid sword can not control the simulated water and therefore can not damage them. The merman king challenges Sophia to a duel, in which he breaks her sword. Doraemon uses the Sword Round Lightning to defeat the merman king in a duel. Once Sophia gets the mermaid sword, she uses it to purify the ocean, telling Doraemon that is the true power of the mermaid sword.
Afterwards, Doraemon, Nobita, Gian, Suneo and Shizuka return home.