In the Kingdom of Avalor, Elena takes Naomi up a mountain to show her her favorite view of the kingdom. Elena laments to Naomi how she was trapped in the Amulet of Avalor for forty-one years and then presents to her a broken wand. She tells her that it was Shuriki's wand and how she would still be trapped in the Amulet if it was not for a brave young princess: Sofia. Elena then proceeds to tell Naomi the whole story:A coach is heading toward Avalor Palace. It is being chased by a green mist. When the coach reaches the castle, Elena comes out to greet her parents just in time to see a person come out of the mist who kills Elena's parents with a spell. The sorceress then proceeds to strike Elena with the same spell.The attack is revealed to be a daydream that Sofia is having. Flora flies by and dismisses the students for summer vacation. As the Royal Kids of Enchancia heads back to the coach, Sofia's amulet starts to glow blue alerting her that it is time to go to the Secret Library.Meanwhile, King Roland and Queen Miranda are trying to decide where to take their kids for their summer vacation. When the Royal Twins meet up with them, they reveal they still have not picked a place out. Meanwhile, Sofia grabs Behind the Walls and heads to the Secret Library.When she arrives, the Library selects a book called "The Lost Princess of Avalor" to the shock of Sofia. When the book goes into the pendulem, it turns into a man known as Alacazar, the Royal Wizard of Avalor. He then proceeds to tell Sofia the story of The Lost Princess of Avalor, which is the tale of Princess Elena. On her fifteenth birthday, she was given the Amulet of Avalor by her mother. But on one fateful day, an evil power-hungry sorceress named Shuriki invaded Avalor. She attacked and murdered King Raul and Queen Lucia and set her sights on the palace. As the story goes, Elena chose to face Shuriki on her own. When Shuriki tried to strike her down, the Amulet saved Elena's life by pulling her inside it. Alacazar found the Amulet and discovered that the only way to free Elena was to find a special Princess to set her free. For years Alacazar searched for this princess until he grew too old to continue. He then used the last of his magic to turn himself into the book he transformed from. Alacazar also explains that over the years the Amulet has tested many princesses before her and up till now the Amulet has chosen Sofia to set Elena free, and the daydreams she has been having were Elena telling her the time has come to set her free. In order to free Elena, Sofia must go to Avalor and summon his chanul. Alakazar also warns Sofia to be careful as Shuriki is as powerful and evil as ever. Sofia goes to her family and convinces them they should spend their vacation in the Kingdom of Avalor. The Royal Family of Enchancia then sets sail for Avalor.The Royal Family arrive on the Royal Galleon under the command of Admiral Vasquez. When Sofia sees Avalor City, she wonders how she is going to find Alacazar's house in such a huge city. Sofia is horrified to learn that they are going to meet Shuriki since Roland sent a message ahead telling her they were coming since it is the custom to greet the King or Queen when visiting a new Kingdom. Meanwhile, Shuriki is using her magic to get ready for their arrival when Chancellor Esteban comes in and informs her they have arrived. The Royal Family are greeted by cheering crowds but Sofia notices that the crowd is not actually happy. Shuriki arrives to greet them and Sofia is wary instantly. Sofia notices a flute playing to Shuriki's chagrin. As they get into the coach, Sofia spots Shuriki's guards take the flute from the boy playing it, upsetting him. They arrive at Avalor Palace where Shuriki gives them a tour before taking them out to a feast. Suddenly, winged jaguars known as Jaquins arrive and snatch some of the food. Shuriki is about to pull out her wand but Esteban stops her and leads the group back inside. Sofia's Amulet glows and pulls her toward the Jaquins which Sofia takes to mean they can help her. Sofia goes up to the Jaquins and asks for their help. The Jaquins refuse stating they do not help friends of Shuriki's. However, after hearing Sofia's plan to help bring Princess Elena back, the Jaquins instantly become delighted to help and take her to Alacazar's house.Sofia arrives at Alacazar's house. A woman greets her but proves to be of no help when Sofia tells her why she is here. Suddenly, Alacazar's grandson Mateo walks up and asks Sofia about her magical knowledge and reveals that the woman is his mother. Sofia introduces herself and reveals Alacazar sent her. Mateo realizes that Sofia's Amulet is the Amulet of Avalor and takes her to his workshop. Once there, Mateo reveals that he has been training himself to be a wizard in secret since Shuriki outlawed all magic other than her own when she took over. He also reveals that a chanul is a spirit animal that acts as a guide to all the magical things in the world and that it was Alacazar's chanul who revealed to him of Elena's imprisonment in the Amulet and how to get her out. Mateo summons Alacazar's chanul, Zuzo, who tells Sofia what she has to do to free Elena from the Amulet: She has to get Shuriki's wand. Once she gets it, she has to wrap the amulet around it and put both on the Crown of Aziluna, a Maruvian healer who could undo any spell or curse and located in the mountains is a statue of him. After Zuzo vanishes, Sofia does not know how she is going to get Shuriki's wand until Mateo accidentally gives her an idea: To dance with her. At Avalor Palace, Armando is entertaining the Royal Twins while Shuriki's conversation with Roland and Miranda is having her contemplating invading Enchancia. Sofia comes in and convinces Shuriki to dance the sambarossa with her. After Armando has shown them how, everyone dances the sambarossa. During the dance, Sofia pretends to trip and steps on Shuriki's shoes. While Shuriki is recoiling from the pain, Sofia steals Shuriki's wand from her. After pocketing the wand, Sofia convinces Shuriki to let her and her siblings play hide and seek with Armando while she and her parents resume their discussions. When Armando starts counting, Sofia pulls her brother and sister away with her. Amber realizes that Sofia is up to something and asks her about it. Sofia promises her and James that she will explain everything later and right now needs them to stay hidden for as long as possible. James instantly agrees but Amber demands to know why Sofia will not tell them, only for her to say it is for their own good. Sofia heads back to Mateo and the Jaquins with the wand. Both are impressed with her for pulling it off and then the group then flies off to free Elena.The group arrives at the Maruvian temple where the Crown of Aziluna is, and go inside to find a magical lake. For the magic to work, Sofia needs to swim across the enchanted waters. So Sofia turns herself into a mermaid and dives into the lake. Once underwater, she finds the Crown of Aziluna and does as Zuzo instructed. This causes an island with a statue on it to rise out of the water. Once it surfaces, Sofia slides down to the base of the statue. Suddenly, Sofia's amulet glows pink and descends. Once it hits the ground, a person appears in a flash of pink light. The Amulet returns itself to Sofia now pink. The person is revealed to be Princess Elena, who is finally free. Elena hugs Sofia and greets the Jaquins and Mateo. She then voices her intention to free Avalor from Shuriki. Upon leaving the temple, Elena tells the group of her plan: She is going to use Shuriki's wand against her. Sofia and Mateo want to help but she refuses and flies back to face Shuriki alone with Sofia and Mateo going after her anyway.Armando is still playing hide and seek with Amber and James when Elena lands in the palace. Skylar wants to help but Elena tells him she has to do this alone. Elena confronts Shuriki in the throne room and tells Shuriki it is time to pay for her crimes, to Shuriki's horror. When Roland asks "What crimes?" Elena brings up how Shuriki invaded Avalor and seized the throne from the Royal Family of Avalor, her family. Shuriki tries to pull out her wand only to find out that Elena has it, which makes her deduce that Sofia took it. Miranda is shocked to learn of her daughter's involvement, which Elena confirms, while Shuriki has the Avalor Royal Guards arrest Roland and Miranda. Elena then tries to blast Shuriki, but only succeeds in blasting aside a tapestry that reveals a painting of Elena's little sister and grandparents. Shuriki reveals that was how Alacazar protected them: By placing them inside an enchanted painting even her magic cannot touch. She also reveals that Esteban is Elena's cousin, and then takes back her wand before ordering her guards to seize Elena. However, Skylar flies in and helps Elena escape. Shuriki orders her guards to throw Sofia's family into the dungeon and to capture Sofia and Elena. Roland orders Shuriki to leave Sofia alone and how she'll regret throwing his family in the dungeon, but Shuriki smugly replies that she doubts it. Elena meets up with Sofia and tells her that Shuriki has her family. Together, they fly back to Mateo's house.When they arrive back at Mateo's house, Mateo's mother, Rafa, comes out and reveals the spell that can free Elena's family. Citizens of Avalor also come over and, at Sofia's urging, Elena agrees to let them help. Sofia and Elena fly to a secret entrance to the castle and sneak into the dungeon. Once inside, they meet Armando, who agrees to help. While Armando distracts the guard, Sofia sneaks past him using her shrinking ability. Sofia finds her family and lets them out. After locking up the guard, Elena explains everything to Roland and Miranda, who forgive Sofia for hiding her real intentions for visiting Avalor. The group then sets off to execute Elena's plan. Meanwhile, Shuriki demands that Esteban produce the results she desires. Esteban protests that when he helped her invade Avalor she promised no one in his family would get hurt to which Shuriki retorts that she also promised him power which she granted after appointing him Chancellor. Shuriki tells him to be grateful she kept one of her promises, or he will end up like his aunt and uncle, King Raul and Queen Lucia. Suddenly, Luna flies in and attacks Shuriki, who chases after her. Once Shuriki is gone, Mateo sneaks in and, using the spell his mother gave him, frees Elena's family, who happily reunite with Elena. The entire group then flies off to execute the next part of the plan: rallying the citizens of Avalor against Shuriki. The Avalorians and the Enchancians all march on the castle together and overwhelm the guards, who lock the gate.Sofia and Elena fly in and open the gates while Roland keeps the guards busy, through which the Avalorians march through. Despite being outnumbered, and the royal guards fleeing like cowards, Shuriki still has her magic, and as Shuriki raises her wand to blast Elena, Esteban, who was pretending to serve Shuriki to protect his family from her, grabs Shuriki's wand and tosses it to Elena, who snaps it in two. With her wand broken, Shuriki's powers are destroyed and she ages into an old woman, and a horribly weakened Shuriki falls down a waterfall and swims away. Esteban then proclaims Elena is the rightful heir of Avalor. Sofia offers the amulet back to Elena, only to be told that Elena wants her to have it. Elena then assumes the throne of Avalor, to the joy of all the Avalorians. Back in the Secret Library, Sofia and Alacazar both review the story Sofia finished. She has given Elena's story a great ending which has also given her story a great beginning. After Alacazar vanishes, Sofia's dress undergoes a transformation and she leaves the Secret Library. Back in the present, Elena and Naomi both decide to lock Shuriki's wand away in the treasury forever and then head back to the palace together.