The film's plot follows the story of Paikea Apirana. The village leader should be the first-born son, a direct patrilineal descendant of Paikea, the Whale Rider, he who rode on top of a whale (Tohora) from Hawaiki. Pai is originally born a twin, but her twin brother and her mother died during childbirth. Pai is female and so technically cannot inherit the leadership. While her grandfather, Koro, later forms an affectionate bond with his granddaughter, carrying her to school every day on his bicycle, he also condemns her and blames her for conflicts within the tribe.
After the death of his wife and despite overwhelming pressure from Koro, Pai's father refuses to assume traditional leadership or finish the waka that he had started building for the baby son; instead, he moves to Germany to pursue a career as an artist. At one point, Paikea decides to live with her father because her grandfather says he doesn't want her. However, as they are driving away, she finds that she cannot bear to leave the sea as the whale seems to be calling her back. Pai tells her father to return her home.
Koro leads a cultural school for the village's first-born boys, hoping to find a new leader. He teaches the boys to use a taiaha (fighting stick), which is traditionally reserved for males. Pai is interested in the lessons, but is discouraged and scolded by Koro for doing so. Pai feels that she can become the leader (although no woman has ever done so) and is determined to succeed. Her grandmother, Nanny, tells Pai that her second son, Pai's uncle, had won a taiaha tournament in his youth while he was still slim and so Pai secretly learns from him. She also secretly follows Koro's lessons. One of the students, Hemi, is also sympathetic towards her.
Koro is enraged when he finds out, particularly when she wins a taiaha fight against Hemi. Koro is devastated when none of the boys succeeds at the traditional task of recovering the rei puta (whale tooth) that he threw into the ocean, the mission that 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 also calls out to them and they hear her call.
One day Pai, her uncle, her uncle's girlfriend Shilo, and others take the boat to where Koro flung the rei puta into the sea. Pai confidently declares she'll find it and dives into the water. She finds the rei puta, which means that she is the rightful leader. Nanny does not think Koro is ready to accept this and does not tell him. 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 interschool 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 southern 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, and even a tractor does not help. Koro sees that 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.
When Koro walks away, Pai climbs onto the back of the largest whale (traditionally said to belong to the legendary Paikea) on the beach and coaxes it to re-enter the ocean. The whale leads the entire pod back into the sea; Pai submerges completely underwater before being thrown off the whale's back. Fearing Pai is lost, Nanny reveals to Koro that his granddaughter found the rei puta, and Koro realises the error of his ways. When Pai is found and brought to the hospital, Koro declares her the leader and asks for 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. In voiceover, Pai declares, "My name is Paikea Apirana, and I come from a long line of chiefs stretching all the way back to the Whale Rider. I'm not a prophet, but I know that our people will keep going forward, all together, with all of our strength."
