The Sunken Treasure Ship first appeared in the film, when Ariel first spotted it with her friend, Flounder. Ariel wanted to explore inside of the ship, but Flounder refused. Ariel told him to stay outside of the ship, and to watch out for sharks, but Flounder started panicking and went inside with her. They began exploring the Ship, trying to find any treasure (human objects), while Ariel was feeling excited, Flounder was feeling scared. He screamed while staring at a skeleton, and bumped into a part of the ship, causing it to collapse, sending him swimming back to Ariel. The part had a hole to top floor, where Ariel finds two objects, a fork (called a Dinglehopper by Scuttle) and a pipe.
Suddenly, they were attacked by Glut the Shark, swimming away as fast as they could. Fortunately, Glut had gotten its neck stuck in the ship's anchor.
The Sunken Ship isn't seen again, until the climatic battle of the film, where it is seen floating back up to the surface. Prince Eric starts to climb up its ropes and sail it, ready to fight against Ursula. Eric sails towards her, the front being straight and pointed. It impales Ursula, causing her demise. She blew up with the ship, and Eric made it back to shore.