An expedition led by Sensei Wu, Misako, Clutch Powers, and his assistants go missing while exploring an uncharted island in the storm belt. The ninjas must pick up their trail with the help of Twitchy Tim. Having journeyed to the island years ago, Tim is still scared to go back due to being struck by lightning twelve times on the island. Reluctantly, he agrees to help. After surviving their journey to the island, the ninjas begin to explore it, discovering the abandoned expedition camp.
While making their way across the island, the ninjas unexpectedly befriend a dragon and name it Zippy. They are later ambushed by living stone statues that can channel the ninja's elemental powers. While trying to escape the stone guardians, Nya, Zane, Kai, and Cole are captured by hostile islanders named the Keepers and encounter Wu, Misako, and Clutch Powers in captivity. Luckily, Lloyd and Tim manage to escape. When the ninja are taken to meet the Keepers' leader, Chief Mammatus, he accuses them of trying to steal an artifact called the Storm Amulet, which was pried from the head of a giant sea serpent named Wojira, placing the beast into a deep sleep. For thousands of years, the Keepers have upheld a vow to the First Spinjitzu Master to protect the amulet from Wojira.
The ninjas are imprisoned, while Jay is taken to an unknown location by the Keepers, who call him "The Gift of Jay". Lloyd finds the Keepers' village and frees the ninja with the help of Zippy. Meanwhile, Clutch Powers tries to steal the amulet, but he and the ninjas are recaptured. They have to watch Jay being sacrificed by the Keepers to appease the reawakened spirit of Wojira.
However, when Lloyd finds a wooden tooth, he begins to suspect that Wojira is fake. He informs Chief Mammatus, who tells him that since Wojira returned, the Keepers have been giving away their treasure to appease her. When Jay reaches a hidden cave along the coast, he discovers that it is a secret hideout for thugs who have escaped from Kryptarium Prison and that Ronin devised a scheme to trick the Keepers into giving him their treasure. While the ninjas are battling Ronin's henchmen, Ronin tries to escape but is stopped by Tim, who conquers his fear and crashes into his fake Wojira boat. In the aftermath, Clutch Powers tries to steal the Storm Amulet again but is stopped by Nya, and the ninjas befriend the Keepers. Wojira is sleeping in a temple at the bottom of the ocean with another amulet on her forehead.
While trying to stop a criminal named Miss Demeanor from smuggling vengestone, Nya is losing control of her powers. Master Wu tells the ninja that the First Spinjitzu Master once controlled the elements but never wind and water because they belonged to Wojira, a storm and sea spirit, and god. Wojira fell into a deep slumber after Nyad pried the amulets off the serpent's forehead. Ray and Maya, Kai and Nya's parents, arrive to help Nya control her powers.
While Pixal and Zane are on a mission, they experience an energy pulse deep in the ocean and conclude that it affected Nya's powers. The ninjas decide to investigate on the Hydro Bounty, a newly made submersible vessel.
Nya, Maya, Jay, Lloyd, Zane, and Pixal journey to the depths of the ocean with Maya stowed away on board. Unfortunately, the Hydro Bounty crashes causing them to be stranded.
Maya and Nya decide to use mechs to reach the energy source and discover an underwater temple. They find Kalmaar, the son of King Trimaar, trying to awaken the serpent Wojira.
He takes them prisoner and overhears Nya revealing the location of the Storm Amulet. Meanwhile, Jay decides to risk charging the battery in the Hydro Bounty using his elemental powers.
Nya and Maya are rescued by Jay and Lloyd but they are captured and taken to King Trimaar who accuses them of trespassing. Kalmaar performs a palace coup by striking his father with his weapon and declaring himself king of the Merlopians. His adopted brother Benthomaar learns the truth from Trimaar.
Benthomaar helps the ninja to escape Merlopia. They decide to travel to the island to obtain the Storm Amulet before Kalmaar can claim it.
The tragic tale of Benthomaar is revealed, a tale filled with treachery and betrayal, but also a glimmer of hope.
On the Island of the Keepers, the ninjas warn Chief Mammatus to prepare to defend the Storm Amulet. However, Zane realizes it is a fake and that the real amulet was taken by Clutch Powers to the Explorers Club.
Wu, Cole, Misako, Kai, and Ray arrive at the Explorers Club and are forced to battle Kalmaar. Meanwhile, Nya uses her powers to call whales to bring the stranded Hydro Bounty back to Ninjago City.
As Kai is pursuing Kalmaar through the streets of Ninjago City, Antonia and Nelson obtain the amulet and are chased by Kalmaar, and he escapes with the amulet.
Benthomaar tells the ninja the tale of Nyad, the first Elemental Master of Water, who defeated Wojira by becoming one with the ocean. When Kalmaar tries to leave the city, Nya steals the amulet and Cole takes it to Shintaro for protection without realizing it is fake, allowing Kalmaar to reawaken Wojira.
Rising sea levels mark the invasion of Ninjago City by Kalmaar riding on Wojira, which forces the citizens to evacuate. While the ninjas are trying to save civilians, Nya challenges Kalmaar and Wojira.
Jay becomes trapped in his submersible vehicle and is saved by Benthomaar, but inhales water in his lungs. To save Jay and Ninjago City, Nya becomes one with the ocean, an act that can never be undone, causing the water to be removed from Jay's lungs. A battle takes place between the ninjas and Kalmaar in which Benthomaar breaks Kalmaar's trident causing him to lose control of Wojira. This results in Kalmaar being swallowed whole by Wojira. Nya transforms into a water dragon and defeats Wojira by destroying the Wave Amulet. Having merged with the endless sea, however, Nya can no longer remain on land and feels the ocean calling to her. After a tearful goodbye, she leaves the Ninja and returns to the ocean. Afterward, the ninjas hold a memorial ceremony to honor her, While Nya is happily swimming with the whales.