King Agnarr of Arendelle tells a story to his young daughters, Elsa and Anna, that their grandfather, King Runeard, had established a treaty with the neighboring tribe of Northuldra by building a dam in their homeland, the Enchanted Forest. However, a fight occurs, resulting in Runeard's death and enraging the elemental spirits of Earth, Fire, Water, and Air of the forest. The spirits disappear and a wall of mist traps everyone in the Enchanted Forest. Young Agnarr barely escapes due to the help of an unknown savior.
Three years after her coronation, Elsa celebrates autumn in the kingdom with Anna, Olaf the snowman, Kristoff the ice harvester, and Kristoff's reindeer Sven. One night, when Elsa hears a mysterious voice calling out to her, she follows it and unintentionally awakens the elemental spirits, which forces everyone in the kingdom to evacuate. Grand Pabbie and the Rock Troll colony arrive at Arendelle, and Pabbie informs that they must set things right by discovering the truth about the kingdom's past.
Elsa, Anna, Olaf, Kristoff, and Sven embark to the Enchanted Forest, following the mysterious voice. After the mist parts at Elsa's touch, the Air spirit, in the form of a tornado, appears and sweeps everyone in its vortex. Elsa stops it, forming a set of ice sculptures. The sisters discover the sculptures are images from their father's past. They encounter the Northuldra and a troop of Arendellian soldiers who are still in conflict with one another. When the Fire spirit appears, Elsa discovers the spirit to be an agitated magical salamander, and calms it down. Elsa and Anna arrange a truce between the soldiers and the Northuldra after discovering that their mother, Queen Iduna, was a Northuldran who had saved Agnarr, an Arendellian. They later learn the existence of a fifth spirit who will unite people and the magic of nature.
Elsa, Anna and Olaf continue to head north, leaving Kristoff and Sven behind. They find their parents' wrecked ship and a map with a route to Ahtohallan, a mythical river told by their mother to contain all explanations of the past. Elsa sends Anna and Olaf away to safety and continues alone. She encounters and tames the Nøkk, the Water spirit who guards the sea to Ahtohallan. Reaching Ahtohallan, a glacier, Elsa discovers that the voice calling to her was the memory of young Iduna's call; that her powers were given to her by nature because of Iduna's selfless act of saving Agnarr; and that Elsa herself is the fifth spirit.
Elsa then learns that the dam was built as a ruse to reduce the Northuldra's resources because of King Runeard's dislike of the tribe's connection with magic and his intention to incorporate the region into his kingdom. She also learns he was the one who initiated the conflict by killing the unarmed leader of Northuldra. Elsa sends this information to Anna before becoming frozen due to venturing into the most dangerous part of Ahtohallan. This in turn causes Olaf to fade away.
Anna, in despair, sits alone in a cave and struggles to go forward but decides to do the next right thing. Anna receives Elsa's message and concludes that the dam must be destroyed for peace to be restored. Anna finds and awakens the gigantic Earth spirits and lures them towards the dam. The giants hurl boulders aimed at Anna which destroy the dam, sending a flood down the fjord to the kingdom. Elsa thaws out and returns to Arendelle, diverting the flood and saving the kingdom.
As the mist disappears, Elsa reunites with Anna and revives Olaf, and Anna accepts Kristoff's marriage proposal. Elsa explains that she and Anna are now the bridge between the people and the magical spirits. Anna becomes the Queen of Arendelle while Elsa becomes the protector of the Enchanted Forest, who regularly visits Arendelle as peace has been restored.
In a post-credit scene, Olaf visits Elsa's ice palace and recounts the events he experienced to Marshmallow and the Snowgies.