Playboy business tycoon Liu Xuan (刘轩, played by Deng Chao) purchases the Green Gulf, a wildlife reserve, for a sea reclamation project, and uses sonar technology to get rid of the sea life in the area. Unknown to him, the Green Gulf is the home of merpeople and the sonar (in addition to heavy pollution) has caused many of them to die or get sick. The few survivors live in an abandoned shipwreck in the gulf, and want to assassinate Xuan for his deeds. The merfolk send Shan (珊, played by Lin Yun), a beautiful young mermaid, who has been trained to walk and dance on her fins and hide among humans, to seduce and kill Xuan. At an extravagant party celebrating Xuan’s success, Shan, pretending to be a dancer, gives him her telephone number and asks him to call her.
Xuan, believing that Shan is a prostitute, calls her number in order to make his female business partner, Ruolan, jealous. Shan tries to kill Xuan, but all her attempts backfire. In the end, Xuan decides to take Shan back home, and along the way Shan takes him to a funfair where she works. While there, Shan tries to show Xuan there are more important things than money, and Xuan is impressed with Shan’s simple, amusing antics. They spend the day together and develop feelings for each other. When Xuan finally takes Shan home, Shan quickly sends Xuan away before her people can kill him. The next day, Xuan takes Shan for another date and proposes, saying that he is lonely. Xuan admits that even though they only met the day before, he already knows that she is the one for him. Shan, in a bit of shock and confusion, rejects him and admits that she was sent there to kill him. Xuan kisses her, but the kiss is interrupted by Ruolan. As Shan runs out, Ruolan stops Xuan from following her. Xuan gets angry and tells Ruolan to cancel their business deal.
That night, as Shan gets into an argument with the other merpeople, Xuan goes to Shan’s house to talk to her. There, he discovers that she and her family are merpeople. Against Shan’s wishes, the others capture Xuan and explain that he is killing them with his development project. Xuan is about to be killed when Shan helps him escape. Octopus, one of Shan’s friend, gets mad and ask her if she has fallen in love with Xuan. She refuses to answer and goes on crying. Xuan returns home and, after the shock has worn off, decides to investigate the consequences of his project. He turns off the sonar but mistakenly tells Ruolan that Shan is a mermaid and reveals where the other merpeople live. Ruolan tells Xuan that George, her henchman, also believes in mermaids and has been trying to find one. She also gets angry at Xuan for not returning her affections and vows to kill Shan. Xuan tries to stop them but they dismiss him and proceed to the abandoned ship. The merpeople are attacked by Ruolan’s mercenaries, and many of them are killed. Soon enough, the merpeople realize that the sonar had been turned off and return to the ocean. Shan gets shot and chased as she tries to escape them. Xuan, using a jetpack, arrives in time to retrieve a badly-injured Shan. As he is carrying her to the ocean, Ruolan angrily shoots him three times. George stops her before she could shoot him again. Shan insists that Xuan leave her, but he continues to carry her to safety. While Ruolan and George get arrested, Xuan collapses from his wounds.
Three years later, a student arrives at Xuan’s home to thank him for setting up a scholarship for research into environmental protection. The student asks Xuan whether merpeople are real and if the story that he fell in love with a mermaid is true, but Xuan denies it. Xuan then introduces the student to his wife, “Lucy”, who is actually Shan in a human disguise. Xuan tells the student to not believe in fairytales and myths. The screen then goes to Xuan and Shan swimming in the ocean along with the other merpeople.