A young married couple, Alma and Pedro Madrigal, flee from an armed conflict in their Colombian village, with their baby triplets, Pepa, Julieta and Bruno. Pedro is killed by the raiders, but Alma's magic candle repels them, and creates the sentient house Casita and the village of Encanto, which is protected by high mountains.
Fifty years later, and the village is thriving under the candle's protection; when each member of the Madrigal family turns five, they are granted magic powers or a "gift", which are then used to serve their community; Bruno, however, is scorned by the village for his powers of foresight and banished, and Julieta's 15-year-old daughter Mirabel is inexplicably powerless.
On the evening of Pepa's 5-year-old son Antonio's ceremony, during which he receives the power of talking to animals, Mirabel sees cracks forming the Casita, and the candle's flame flickering; however, her warnings fall on deaf ears, when Casita appears undamaged to the others; after overhearing Alma praying, Mirabel resolves to save the miracle. The next day, a conversation between Mirabel and her older sister Luisa-who has super strength and is feeling overworked-spurs her to visit Bruno's room, located in a tower.
Mirabel enters the tower and discovers a cave, and retrieves some shards of emerald glass; meanwhile, Luisa discovers her gift is faltering. After her family remind her why Bruno is shunned, Mirabel pieces the glass together, and sees a picture of herself standing in front of the crumbling Casita.
Later that evening, Mirabel's oldest sister, Isabela, who has the power to control plants, is scheduled to become engaged to the Madrigals' neighbor, Mariano; things go awry when Pepa's daughter Dolores-who has the power of enhanced hearing-lets Mirabel's discovery slip, and Pepa-who can control the weather-causes a rainstorm.
Amidst the chaos, Mirabel follows a group of rats and is led down a secret passage, where she discovers Bruno is hiding; it turns out Bruno had been living in the Casita's walls for years, and the vision changes between Mirabel saving Casita and causing its fall, making him believe she is the key to saving the miracle; refusing to let Mirabel get hurt, he broke the vision and vanished; at Mirabel's request, Bruno conjures a vision that at first resembles the first one, but then changes to show a vision of Mirabel and Isabela hugging.
Mirabel begrudgingly apologizes to Isabela, who reveals she only went along with the proposal to appease Alma; Mirabel helps Isabela develop her powers, and they embrace, but are stopped by Alma, who proceeds to blame Mirabel for the family's misfortune. Finally fed up of Alma's abuse, Mirabel calls her out for her impossible demands, and how none of the family will ever be good enough for her. The row causes a crack to form, splitting the mountain in half, and causing the Casita to collapse; the candles burns out, and the family is powerless. Heartbroken, Mirabel runs away and the family form a search party.
Alma finds Mirabel by the riverside where Pedro was killed, and she explains her backstory to her, and her determination to preserve the miracle, blinded her to the harm she was causing her family, finally accepting responsibility for what happened. Mirabel and Alma reconcile, and with Bruno in tow, return to the town, where the family and townspeople rebuild the Casita. Mirabel installs a new doorknob into the main door, restoring the family's powers, and she and Bruno join the family for another photo.
