Warning: Wikipedia contains spoilers

Andersen begins the tale of The Little Mermaid begins with the following:

Far out at sea the water's as blue as the petals of the loveliest cornflower, and as clear as the purest glass; but it's very deep, deeper than any anchor can reach. Many church steeples would have to be piled up one above the other to reach from the bottom of the sea to the surface. Right down there live the sea people.

The Little Mermaid lives at the sea bottom with her father the Sea King, her grandmother and her 4 older sisters, born one year apart. When a mermaid turns 15 she may swim to the surface to watch the world above, and as the sisters becomes old enough to visit the surface The Little Mermaid listens longingly to their desciptions of the surface and the humans every year.

When The Little Mermaid turns 15 she ventures to the surface. She sees a ship with a beautiful prince, and falls in love with him. There comes a great storm, and the prince almost drowns, but The Little Mermaid saves him and she delivers him to the shore near a temple. But the prince never sees her because he is unconscious.

The Little Mermaid spends her days longing for the prince, and longing to have a soul and eternal afterlife like humans do, instead of turning to foam when she dies. At last she goes to the Sea Witch, who sells her a potions that gives her legs, in exchange for her tongue, because The Little Mermaid has the most beautiful voice in the world. But drinking the potion will feel like a sword being passed through her, and walking on her feet will feel like walking on knives. And she will only get a soul if the prince loves her and marries her, otherwise she will die and turn to foam the day the prince marries another woman and her heart breaks.

She drinks the potion and meets the prince, who is attacted to her beauty and grace. She is mute so she cannot talk to him, but he loves her like one loves a little child.

One day the prince sail to a neighboring king to find a bride. It turns out that the kings daughter is the woman from the temple who found the prince after the little mermaid delivered the prince to the shore. The prince loves her, and shortly after they announce the wedding.

The Little Mermaid's heart is broken, and she despairs as the wedding night comes. But her sisters come to her, and gives her a knife which they got from the sea witch in exchange for their hair. If The Little Mermaid slays the prince with the knife she will become a mermaid again and be able to live with them for the rest of her life.

But The Little Mermaid cannot bring herself to kill the sleeping prince lying with his bride, and instead throws herself into the sea and dissolves into foam. But she doesn't die, she become a daughter of the air, a being invisible to humans. By striving for 300 years to do good deeds she will earn a soul, and float into the kingdom of heaven.