Ponyo is based loosely on both Hans Christian Anderson's "The Little Mermaid" and the Japanese folktale Urashima Taro. Ponyo is a fish princess who tries to become human.
Story of Ponyo
Brunhilde is a fish princess who runs away from her father's kingdom and winds up on the shore of an island in Japan. There, she's rescued by a young human boy named Sosuke, who names her Ponyo and promises to take care of her forever. But her father's wave demons bring her back, whereupon she calls herself Ponyo and declares that she wishes to be human. Ponyo's father tries to find her mother, during which time Ponyo's sisters help her escape once more and use magic to turn her human.
Ponyo returns to Sosuke's home, but her father sends a tidal wave to the island. Sosuke's mother leaves the house to check on her patients and doesn't return home that night. The next day Ponyo and Sosuke set out to find Sosuke's mother, finding most of the island submerged. Ponyo's mother, meanwhile, decides that she will test the two. Ponyo loses her human form and becomes a fish once more; Ponyo's mother asks Sosuke if he can love her as a fish. Sosuke says that he loves all forms of Ponyo, and Ponyo's mother returns her to human form-- and the island to peace.