The story begins with Odette dancing in her father's bakery. Odette feels happy because she knows how to dance a ballet dance which is to be very hard to handle or to be practiced. Her sister, Marie, is also shown as a fast horse rider. A unicorn named Lila arrives in the village and manages to escape hunters and runs into an Enchanted Forest with the curious Odette in pursuit. Lila becomes trapped, so Odette tries looking for something good enough to free the unicorn. She spots a magical crystal within the hollow of a nearby tree and takes it out. Little does she know that the crystal was meant for whoever removed it to defeat the evil wizard Rothbart.
The Fairy Queen, who was watching the scene, comes to Odette and tells her that she is the chosen one for purging the evil plaguing the forest, which is the Fairy Queen's cousin, Rothbart. Odette, not wanting to get mixed up in the situation, refuses. The Fairy Queen complies and sends Lila to escort her out of the forest. Suddenly, Rothbart appears in the woods with his daughter, Odile, and turns Odette into a swan. The Fairy Queen is able to partially reverse the effects of the spell, in which, Odette retains her human form by night, but during the day, she is forced to stay as a swan.
Odette also meets the other elves of the forest: Carlita, now a skunk, Ivan, a porcupine as well as a few others. Odette's father and sister, start searching for her, after noticing that Odette is missing. Prince Daniel, the prince living in the castle in Odette's village, is introduced. A spirited man, he prefers exploring rather than marriage, much to the dismay of his mother.
The Fairy Queen also gives Odette a crown with the crystal in it that will protect her from Rothbart. Odette is determined to find a solution to the problem and goes to a magical library to find it. However, they are unable to locate the book and Odette is disheartened. Rothbart lures Prince Daniel into the forest, determined to get him to hunt Odette. However, Daniel is captivated by the swan's beauty and decides to let it live. The two soon fall in love when he sees her true form. They dance gracefully and afterwards Odette transform into a swan.
Daniel asks Odette to a ball, but at first she denies until he finally convinces her to come. Soon, Erasmus-the troll in charge of the library- arrives, having found the book. He reveals to them that the solution is true love, which made everyone realize that Daniel can save them all. However, if Daniel falls for another girl, the magic crystal will lose its power. The Fairy Queen teaches Odette how to waltz at the ball but are interrupted when Erasmus is kidnapped. They manage to save him but Rothbart learns of what will be his downfall. So, under a spell, he makes Odile look like Odette in the eyes of Daniel.
Odette, in swan form, races to the castle to warn Daniel about the trick, but is unable to get inside. At the ball, Prince Daniel pledges his love to Odile, thinking her to be Odette, which caused Odette to fall to the ground, the crystal having lost its power and she is mortally weakened.
Rothbart reveals the truth and he and Odile escape. Daniel runs after them and the Fairy Queen attempts to revive Odette, who is barely alive. However, Rothbart turns her (the Fairy Queen) into a mouse and attempts to kill Odette and Daniel. The two fall onto each other, their hands intertwined.
At that moment, the crystal's power explodes outwards, stopping Rothbart, as they two were truly in love. The two awaken and all of Rothbart's evil is undone. At last, Odette and Prince Daniel confess their love for each other. Everyone from the village and the Enchanted forest celebrate. It is revealed that Odette and Daniel are to be married and are finally happy. Rothbart gets his just dessert as he is now a Cuckoo Clock while Odile is a maid.
