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Brunhilde is a fish-girl who lives with her father Fujimoto, a once-human wizard or scientist who now lives underwater, and her numerous smaller sisters. One day, while she and her siblings are on an outing with their father in his four-flippered submarine, Brunhilde is driven by a desire to see even more of the world and floats away on the back of a jellyfish. After an encounter with a fishing trawler (which is being used to clean up the trash-strewn bottom of the harbor), she ends up stuck in a bottle. She drifts to the shore of a small fishing town and is found and rescued by a small boy named Sōsuke. Splitting the bottle open, Sōsuke cuts his finger in the process. Brunhilde licks his wound when he picks her up, and the wound heals almost instantly. After taking a great liking to her, Sōsuke renames her Ponyo and promises to protect her forever. Meanwhile, a distraught Fujimoto is searching frantically for his daughter. Because of his own bad memories of the human world, he believes that Sōsuke has kidnapped her, and he calls his wave spirits to recover her. After the wave spirits take Ponyo away, Sōsuke is heartbroken and goes home with his mother, Lisa, who tries to cheer him up, to no avail.
Ponyo and Fujimoto have an argument, during which Ponyo refuses to let her father call her by her birth-name, "Brunhilde". She declares her name to be Ponyo and voices her desire to become human, because she has started to fall in love with Sōsuke. Suddenly she starts to grow legs and turn into a human, a power granted to her by the human blood she ingested when she licked Sōsuke's finger. Her father turns her back with difficulty and goes to summon Ponyo's mother, Granmamare. Meanwhile, Ponyo, with the help of her sisters, breaks away from her father and uses his magic to make herself fully human. The huge amount of magic that she inadvertently releases into the ocean causes an imbalance in the world, resulting in a huge tsunami. Running pell-mell over the waves of the storm, Ponyo goes back to visit Sōsuke, who is amazed but overjoyed to see her. Lisa is equally amazed, but takes Ponyo's transformation in stride. Lisa, Sōsuke, and Ponyo wait out the storm at Sōsuke's house, where Ponyo learns of some of the things in the human world. Worried about the residents of the nursing home where she works, Lisa leaves to check up on them, promising Sōsuke that she will return as soon as possible.
Granmamare arrives at Fujimoto's submarine. On her way there, Sōsuke's father sees and recognizes her as the Goddess of Mercy. Fujimoto notices the moon appears to be falling out of its orbit and satellites are falling like shooting stars, symptoms of the dangerous imbalance of nature that now exists. Granmamare declares that if Sōsuke can pass a test, Ponyo can live as a human and the world order will be restored. A still-worried Fujimoto reminds her that if Sōsuke fails the test, Ponyo will turn into sea foam.
Sōsuke and Ponyo wake up to find that most of the land around the house has been covered by the ocean. Since it is impossible for Lisa to come home, the two children decide to find her. With the help of Ponyo's magic, they make Sōsuke's toy boat life-size and set out across the ocean.
Over the course of their journey, they see prehistoric fish swimming beneath them, and encounter several other evacuees in boats. After landing and finding Lisa's empty car, Ponyo and Sōsuke head into a tunnel. There Ponyo loses her human form and reverts into a fish from using too much of her magical power to help Sōsuke and others along the way. Meanwhile, Lisa and the residents of the nursing home are below the surface, but have been temporarily given the power to breathe underwater. Sōsuke and Ponyo encounter Fujimoto, but Sōsuke doesn't trust him due to Toki's claims and attempts to flee. However, Fujimoto captures them and takes them down to the protected nursing home.
Sōsuke is reunited with Lisa and meets Granmamare, with whom Lisa has just had a long private conversation. Granmamare asks Sōsuke if he can love Ponyo whether she is a fish or human. Sōsuke replies that he "loves all the Ponyos." Granmamare then tells her daughter that if she chooses to become human once and for all, she will have to give up her magical powers. Ponyo agrees to this, so Granmamare encases her in a bubble and gives her to Sōsuke, and tells him that kissing the bubble will complete Ponyo's transformation. The balance of nature is then restored, and the previously stranded ships head back to port, including Sōsuke's father's. Ponyo jumps high in the air and kisses Sōsuke, transforming back into a human.
- Noah Cyrus as Ponyo a goldfish who was adopted by Sosuke and later turned human.
- Frankie Jonas as Sosuke a five-year-old boy who adopts Ponyo.
- Tina Fey as Lisa, Sosuke's serious mother.
- Liam Neeson as Fujimoto, Ponyo's father and has a thing against humans.
- Matt Damon as Kōichi, Lisa's husband and a captain of the Koganeimaru
- Cate Blanchett as Granmamare, a giant being named the Mother of the Sea.
- Mona Marshall as the Young Mother, a young woman in her 30s.
- Lily Tomlin as Toki, a powerchair-using resident of the Himawari House.
- Betty White as Yoshie, a resident of the Himawari House.
Hayao Miyazaki, the film's director and writer, said his inspiration was the Hans Christian Andersen story, "The Little Mermaid" but his inspiration was more abstract than a story. Along with animation director Katsuya Kondo and art director Noboru Yoshida, Miyazaki devised a set of goals which included to use traditional animation entirely in Ponyo, pursuing the animation and art possibilities without struggling under the demands of the production schedule, showing the quality of Yoshida's artwork as well as celebrating the innocence and cheerfulness of a child's universe. Production of Ponyo began in May 2006, while key animation of Ponyo began in October of that year.
Miyazaki was intimately involved with the hand-drawn animation in Ponyo. He preferred to draw the sea and waves himself, and enjoyed experimenting with how to express this important part of the film. The level of detailed drawing present in the film resulted in 170,000 separate images—a record for a Miyazaki film.
Ponyo's name is an onomatopoeia, based on Miyazaki's idea of what a "soft, squishy softness" sounds like when touched.
The seaside village where the story takes place is inspired by Tomonoura, a real town in Setonaikai National Park in Japan, where Miyazaki stayed in 2005 Some of the setting and story was affected by Richard Wagner's opera Die Walküre.The music also makes reference to Wagner's opera. The character of Sōsuke is based on Miyazaki's son Gorō Miyazaki when he was five. Sōsuke 's name is taken from the hero in the famous novel The Gate.
The name of the ship on which Sōsuke's father works is Koganeimaru, a reference to Studio Ghibli's location in Koganei, Tokyo. Maru (丸) is a common ending for ship names.
Miyazaki wanted his next film to be Ponyo on the Cliff by the Sea 2 but producer Toshio Suzuki convinced him to make The Wind Rises instead.
The film was released by Toho on July 19, 2008, in theatres across Japan on 481 screens—a record for a domestic film. It grossed ¥10 billion ($91 million) in its first month of release,  and a total of ¥15.0 billion ($153.1 million) as of November 9, 2008.
Tokyo Anime Fair chose Ponyo as Animation of the Year of 2008, as revealed in a press release by Anime News Network.
Ponyo was released in the U.S. and Canada on August 14, 2009 by Walt Disney Pictures and The Kennedy/Marshall Company, opening at a wide release at 927 theaters across America, which is by far the widest release for a Studio Ghibli film ever in the U.S, as compared to other Miyazaki films (Spirited Away opened in 26 theaters, Howl's Moving Castle opened in 36 theaters, and Princess Mononoke opened in 38 theaters).
The film's English dub was directed by John Lasseter, Brad Lewis and Peter Sohn of Pixar, an American computer animation film studio based in Emeryville, California (whose first film was Toy Story in 1995), and produced by Frank Marshall, Hayao Miyazaki, John Lasseter, Steve Alpert, and Kathleen Kennedy; the English script was written by Melissa Mathison.
In July 2009, there were multiple pre-screenings of the film in California. Miyazaki traveled to America to promote this film by speaking at the University of California, Berkeley and the San Diego Comic-Con.
Ponyo's eponymous theme song, "Gake no Ue no Ponyo," was released ahead of the film on December 5, 2007, performed by Fujioka Fujimaki (a duo consisting of Takaaki Fujioka and Naoya Fujimaki who are known for their underground band Marichans from the 1970s) and eight year old Nozomi Ōhashi. It entered the top 100 on the Oricon Weekly Charts on July 14, then rose to 24th on (July 21), then 6th on (July 28), and after the release of the film it ranked 3rd (August 4). By the end of 2008, it was ranked as the 14th highest selling single on the Oricon Yearly Charts. Ōhashi was also the youngest participant in the 59th NHK Kōhaku Uta Gassen, beating Cute's Mai Hagiwara's record at age 11. Afterward, Ōhashi announced her unit with Fujioka Fujimaki was disbanding.
An English-translated pop version of the theme was recorded by Frankie Jonas and Noah Cyrus, the voices of Sōsuke and Ponyo in the North American dub, to tie in with the film's English release. The theme plays over the second half of the English version's closing credits; the first half is merely a translated version of the theme rather than remix.
The film score of Ponyo was composed by Joe Hisaishi, Miyazaki's regular collaborator. The score album, published on compact disc in Japan by Tokuma Japan Communications, in South Korea by Pony Canyon Korea and throughout Europe by Germany-based label Colosseum, received a great deal of press in the West, including positive reviews from several veteran film music reviewers.
The film has received very positive reviews from film critics. Rotten Tomatoes reported that the film has a "certified fresh" rating of 92%, based on 159 reviews (146 "Fresh"; 13 "Rotten"), with an average score of 7.6/10. The consensus is that "While not Miyazaki's best film, Ponyo is a visually stunning fairy tale that's a sweetly poetic treat for children and Miyazaki fans of all ages." Metacritic reported an average score of 86/100, based on 29 reviews.
On its opening weekend in the United States and Canada, it made $3,585,852 on 927 screens, which is a per screen average of $3,868. It also opened at number nine at the United States and Canada box office. In the United States and Canada the film made a total of $15,090,399 at the box office. It was released on DVD and Blu-ray, as well as a DVD/Plush Toy pack, on March 2, 2010.
The Japan Times gave the film four out of five stars, and praised the film's simple thematic elements and its visual scheme, and compared the film to Miyazaki's classic animation My Neighbor Totoro.
Anime Diet cited the quality of the translation, noting, "The story and the core of the film was communicated more than adequately through the professional dub and it did not get in the way of the sheer delight and joy that Miyazaki wanted to convey." Citing "slight pacing problems," it gave Ponyo a rating of 88%. The pronunciation of Japanese names in the English cinema version varied between characters, however.
Critics at the Venice International Film Festival generally had high praise. Wendy Ide of The Times said Ponyo "is as chaotic and exuberant as a story told by a hyperactive toddler," and gave it 4 stars out of 5. Roger Ebert of the Chicago Sun-Times gave the film a full four stars, the highest rank on his review scale, stating that, "There is a word to describe Ponyo, and that word is magical. This poetic, visually breathtaking work by the greatest of all animators has such deep charm that adults and children will both be touched. It's wonderful and never even seems to try: It unfolds fantastically."
The film was rated #2 on Dentsu's list of "2008 Hit Products in Japan", after the Wii console.
Ponyo was an entrant in the 65th Venice International Film Festival. It received a special mention in the Bologna Future Film Festival, for "the high artistic and expressive quality of animation able to give form to wonderful imagination of the worldwide cinema master".
In 2009, Ponyo won five awards at the 8th annual Tokyo Anime Awards. The awards included "Anime of the year" and "Best domestic feature". Miyazaki received the award for best director and best original story, and Noboru Yoshida received the award for best art direction.
The film won the awards for Animation of the Year and Outstanding Achievement in Music at the 32nd Japan Academy Prize.