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The film's plot follows the story of Paikea Apirana ("Pai") [In the book, her name is Kahu, short for Kahutia Te Rangi].The leader should be the first-born grandson – a direct patrilineal descendant of Paikea, aka Kahutia Te Rangi in the book, the Whale Rider – he who rode on top of a whale from Hawaiki. However, Pai is female and technically cannot inherit the leadership.
While he does later form an affectionate bond with his granddaughter, carrying her to school every day on his bicycle, he also condemns her and blames her for conflicts happening within the tribe. At one point Paikea decides to leave with her father because her grandfather is mistreating her. However she finds that she cannot bear to leave the sea as the whale seems to be calling her back, she tells her father to turn the car back and returns home. Pai's father refuses to assume traditional leadership; instead he moves to Germany to pursue a career as an artist. Pai herself is interested in the leadership, learning traditional songs and dances, but is given little encouragement by her grandfather. Pai feels that she can become the leader, although there's no precedent for a woman to do so, and is determined to succeed.
Koro leads a cultural school for the village boys, hoping to find a new leader. He teaches the boys to use a taiaha (fighting stick). This is traditionally reserved for males. However, Nanny tells Pai that her second son, Pai's uncle, had won a taiaha tournament in his youth while he was still slim, so Pai secretly learns from him. She also secretly follows Koro's lessons. One of the students, Hemi, is also sympathetic towards her, but Koro is enraged when he finds out, particularly when she wins her taiaha fight against Hemi. Koro's relationship with Pai erodes further when none of the boys succeed at the traditional task of recovering the rei puta (whale tooth) that he threw into the ocean – this mission would prove one of them worthy of becoming leader. With the loss of the rei puta, Koro in despair calls out the Ancient ones, the whales. In an attempt to help, Pai from the beach also calls out to them and they hear her call.
Pai, in an attempt to bridge the rift that has formed, invites Koro to be her guest of honour at a concert of Māori chants that her school is putting on. Unknown to all, she had won an inter-school speech contest with a touching dedication to Koro and the traditions of the village. However, Koro was late, and as he was walking to the school, he notices that numerous right whales are beached near Pai's home. The entire village attempts to coax and drag them back into the water, but all efforts prove unsuccessful; even a tractor does not help. Koro sees it as a sign of his failure and despairs further. He admonishes Pai against touching the largest whale because "she has done enough damage" with her presumption. Also, the largest whale traditionally belongs to the legendary Paikea. When Pai's grandfather, Koro, walks away from the scene, she climbs onto the back of the largest whale at the location and coaxes it to re-enter the ocean. The whale leads the entire pod back into the sea; Pai submerges completely underwater, and the spectators had wondered if she'd drowned, but were relieved when she came back above sea level. When she goes out to sea, Nanny Flowers shows Koro the whale tooth which Pai had previously recovered. When Pai is found and brought to the hospital, Koro declares her the leader and asks her forgiveness. The film ends with Pai's father, grandparents, and uncle coming together to celebrate her status as the new leader, as the finished waka is hauled into the sea for its maiden voyage.