Flora, Fauna and Merryweather appear and introduce Sofia, an eight-year-old girl living in the village with her mother, Miranda who is a shoemaker. One day, Miranda and Sofia are called for a shoe fitting by King Roland II of Enchancia. It's love at first sight for Roland and Miranda. They soon marry, making Miranda the new Queen of Enchancia and Sofia the kingdom's second princess. Upon arriving at the castle, Sofia meets her new father, Baileywick the castle steward, Cedric the royal sorcerer and her new older siblings, Princess Amber and Prince James, the royal twins. Sofia is warmly welcomed by everyone at the castle except Amber and Cedric. At the dinner table, Roland tells his new daughter that there will be a royal ball in honor of her royal debut, stating that it's the best way to let everyone know that Princess Sofia has arrived.
After Sofia sees her new room, she has second thoughts and laments in song about her insecurities and her belief that she's not ready to be a princess, because she knows being royal has huge responsibilities and she knows she has no experience when it comes to fulfilling them. She finds her mother and tells her about her uneasy feelings and that she would rather not have a royal ball because she doesn't know how to dance and doesn't want to let anyone down. Miranda assures her she'll be fine. Roland comes out of the shadows and gives Sofia a beautiful necklace that he says is special and tells her she must promise to never take it off. Sofia happily accepts the gift and gives him her word to wear it always and never let it out of her sight. On the way back to bed, Sofia bumps into Cedric, who recognizes her new necklace.
The next day, Sofia, James, and Amber take a flying coach to the Royal Preparatory Academy. There she meets the headmistresses. Flora, Fauna, and Merryweather. Sofia asks them to teach her how to be a true princess by the day of her royal debut ball. While giving her a tour of the school, they tell her that becoming a true princess is something that takes time. Everyone takes an instant shine to Sofia, making Amber jealous and prompting her to convince James to give Sofia a ride on the Enchanted Swing Set. James does so which makes everyone's smiles vanish. The swing ride sends Sofia sailing through the air and then into a fountain with a splash. Despite really being upset, Sofia laughs it off and walks away soaking wet. Sofia stumbles across a baby bird who has fallen out of its nest and helps it return to its mother. Her interaction with the mother bird and her baby shows how lonely she feels now that she's a princess and misses the days when it was just her and her mother. Just then, Sofia's necklace begins to glow and she unexpectedly hears the birds say "Thank you."
After returning home, Cedric intercepts Sofia and takes her to his workshop where he reveals to her that her necklace is the Amulet of Avalor, an magical necklace that can grant the wearer a blessing or a curse depending on a deed, for better or worse. He asks her to let him take a look at it, but she refuses because she promised her father she would never take it off and was taught by her mother that when she makes a promise, she must keep it, no matter what. Unbeknownst to her, Cedric wants to steal the amulet and use its power to seize control of the kingdom.
The next morning, Sofia meets Clover, Mia, Robin and Whatnaught and discovers that she can understand what they're saying. Remembering what Cedric said about her amulet and helping that baby bird, she realizes the amulet has given her the power to talk to animals which Clover is delighted to hear. Clover reveals the reason woodland creatures have always helped princesses is because they want food and Sofia, who's happy to finally have new friends, obliges. Now confident, Sofia now dedicates herself to becoming the best princess ever both to fulfill her responsibilities as one and to prove herself to everyone. However, Sofia remains distant from James and Amber because of the stunt they pulled and she no longer trusts anyone and feels that she's on her own. When she comes home the day before the royal ball, she finds her friends Ruby and Jade waiting for her. During the visit, James comes over to apologize for the trick he and Amber played on her and offers to make it up to her by helping her prepare for her ball which she accepts. He also tells her about Professor Popov's dance class the next day, unaware that Amber is spying on them.
Sofia arrives at dance class but before she can take some dance shoes, Amber comes by and hands her a special pair, saying they can help her dance better. Sofia steps forward to receive her dance lessons, but just a few minutes later the shoes start making her dance oddly and out of control. Sofia realizes the shoes are trick shoes because of the glow they are giving off and stops long enough to notice Amber sneering at her. It's at this moment that Sofia realizes that Amber tricked her just before she's sent crashing to the ground. She gets back up and gives Amber a hateful glare that helps James realize who gave Sofia those trick shoes. When the trio return to the coach, Amber states that she must have grabbed them by mistake, but Sofia doesn't buy this and angrily ignores her, because she knows Amber gave them to her on purpose to ruin her dance lesson.
When she gets back home, she asks Cedric for a dancing spell. He gives her a spell but as soon as she leaves Cedric reveals the spell is actually a sleeping spell, and after it's cast he plans to blackmail Sofia into handing over the amulet. Meanwhile, James angrily confronts Amber about the trick shoe incident, knowing that Amber deliberately gave Sofia those shoes to ruin Sofia's royal ball. Then, after angrily telling Amber that he likes Sofia more than her, he storms out of the room, leaving his twin guilty and upset. Amber tries to call him back but her gown gets caught under one of the legs of her vanity chair and gets ripped. When she goes looking for the maids she hears them in Sofia's room calling her "the prettiest princess in the palace", which makes her run back into her room in tears.
At the ball, Sofia arrives in a sparkling gown and everyone is amazed by how beautiful she looks. She casts the spell Cedric gave her and, to her horror, everyone falls asleep, even Cedric. Thinking she must have said the spell wrong and that she's all alone, Sofia breaks down and cries.
When a tear drops on the amulet, it begins to glow and Cinderella appears. She explains to Sofia that whenever she is in trouble, her amulet will summon a Princess like herself to help. Cinderella reveals that Amber is still awake and can help out, but Sofia is still angry at Amber for all the nasty things she's done to her. However, through a song, Cinderella encourages Sofia to give her another chance, as Sofia may leave the castle someday. Sofia decides to take Cinderella's advice, but when she turns to thank Cinderella, she has vanished. Sofia goes to Amber and takes her to the ballroom.
After seeing what has happened, Amber apologizes to Sofia for her behavior and admits her jealousy. Sofia finally forgives her and the two of them reconcile and finally bond as true sisters. Together they infiltrate Cedric's workshop to figure out how to undo the sleeping spell and awaken everyone once again. But they end up running into Wormwood, Cedric's raven companion. After the woodland critters put Wormwood back in his cage and trick him into revealing where the counter spell book is, the group finds the counter spell, Sofia sewed Amber's gown and Amber gives her a dance lesson.
Sofia casts the counter-spell and the ball proceeds as if nothing has happened with Sofia dancing with her father, now calling him "Dad" instead of "Your Majesty" for the first time. The dance soon develops with the whole family dancing together, having finally become a true family.