In Imperial China, Hua Mulan is an adventurous and active girl, to the disappointment of her parents Zhou and Li, who hope that one day she will be wed to a good husband. As a young woman, Mulan is arranged to meet with a matchmaker to demonstrate her fitness as a future wife. Mulan, flustered, attempts to pour tea in front of the matchmaker, but a spider scares the former's younger sister Xiu, accidentally causing a mishap that destroys the teapot, leading the matchmaker to call her a disgrace in front of her family.

To the north, an imperial outpost is invaded by Rouran warriors, under the leadership of Böri Khan. They are assisted by the witch Xianniang, who uses her magic to pose as a surviving soldier and report the attack to the Emperor of China; he then issues a conscription decree ordering every family to contribute one man to fight Khan's forces.

Imperial soldiers arrive in Mulan's village to enlist recruits and Zhou is forced to pledge his service as he has no sons, immediately falling over in front of the soldiers due to his crippled leg. Realizing that her father has no chance of survival, Mulan flees with his armor, horse, and sword to join in his place. Mulan arrives at the training camp, which is run by Commander Tung, an old comrade of Zhou. Alongside dozens of other inexperienced recruits, she ultimately becomes a trained soldier under his tutelage without exposing her true identity.

Khan's army continues to advance, forcing Tung to end training early and send his battalion to fight. Mulan chases some troops on her own, but is confronted by Xianniang, who mocks her for pretending to be a man. She attempts to kill Mulan, but her attacks are stopped by the leather with which Mulan's chest had been bound to hide her identity. Mulan removes her male disguise, returning to the battle just as the Rourans begin attacking her fellow troops with a trebuchet. Mulan uses discarded helmets and her archery skills to maneuver the trebuchet into firing on a snowy mountain, triggering an avalanche that buries the Rourans.

Mulan rides back to camp and rescues Chen Honghui, a soldier she befriended in camp. Mulan decides to reveal her gender to Commander Tung, she is expelled from the army and begins her return home. On her way, she is confronted by Xianniang, who reveals that she was also shunned by her people and fights for Khan only because he treats her as an equal and that no one else does. Additionally, she reveals that the attacks on the outposts have been a diversion, as Khan's true plan is to capture and execute the Emperor for having his father killed. Risking execution, Mulan returns to her battalion to warn them of the impending capture. The soldiers she befriended stand up for her, and Tung decides to believe her, and allows her to lead a unit to the Emperor's palace.

Xianniang uses her magic to be in the image of the Imperial Chancellor and persuades the Emperor to accept Böri Khan's challenge to single combat, while removing the city guards from their posts. The guards are murdered, and the Rourans prepare to burn the Emperor alive. Mulan's unit distracts the Rourans while Mulan goes to save the Emperor. Khan tries to snipe her with an arrow, but Xianniang, sympathetic to Mulan and disenchanted from Khan, transforms into a hawk and sacrifices herself by intercepting the arrow. Mulan kills Khan, but not before he disarms her and destroys her father's sword.