The Huns, who are led by the ruthless Shan Yu, invade Han China by breaching the Great Wall. The Chinese emperor orders a general mobilization, with conscription notices requiring one man from each family to join the Chinese army. When Fa Mulan hears that her elderly father Fa Zhou, the only man in their family and an army veteran, is going to war once more, she becomes anxious and apprehensive due to his weakening health. Taking her father’s old armor and cutting her long hair, she disguises herself as a man so that she can enlist instead of her parent. The family quickly learns of her departure, and Mulan’s grandmother prays to the family ancestors for Mulan’s safety. The ancestors order their “great stone dragon” to protect Mulan. They send the small dragon Mushu, a disgraced former guardian, to awaken the stone dragon, but he accidentally destroys it in the process. Mushu conceals this from the ancestors and resolves to protect Mulan himself.
Reporting to the training camp, Mulan is able to pass as a man, although her military skills are initially lacking. Mushu provides clumsy guidance to Mulan on how to behave like a man based on his poor judgement and stereotypical views. Under the command of Captain Li Shang, she and her fellow recruits Yao, Ling, and Chien-Po gradually become trained warriors. Desiring to see Mulan succeed, Mushu creates a fake order from Shang’s father, General Li, ordering Shang to follow the main imperial army into the mountains. The reinforcements set out, but arrive at a burnt-out encampment and discover that General Li and his troops have been massacred by the Huns.
As the reinforcements solemnly leave the mountains, they are ambushed by the Huns, but Mulan cleverly uses a Huolongchushui cannon to cause an avalanche, which buries most of the invaders. An enraged Shan Yu slashes her in the chest, and her deception is revealed when the wound is bandaged. Instead of executing Mulan as the law requires, Shang spares her life, but nonetheless expels her from the army. Mulan is left to follow alone as the recruits depart for the imperial city to report the news of the Huns’ destruction. However, it is discovered that several Hun warriors, including Shan Yu, have survived the avalanche, and Mulan catches sight of them as they make their way to the city, intent on capturing the emperor.
At the imperial city, Mulan is unable to convince Shang about Shan Yu’s survival. The Huns capture the emperor and seize the palace. With Mulan’s help, Yao, Ling, and Chien-Po pose as concubines, and are able to enter the palace. With the help of Shang, they defeat Shan Yu’s men; as Shang prevents Shan Yu from assassinating the Emperor, Mulan lures the Hun leader onto the roof, where she engages him in single combat. Meanwhile, acting on Mulan’s instructions and signal, Mushu fires a large skyrocket at Shan Yu. The rocket strikes and propels him into a fireworks launching tower, where he dies in the resulting explosion.
Mulan is initially reprimanded by the Emperor for having destroyed the palace and shamed the army and her family, but is unexpectedly praised by himself and the assembled inhabitants of the city for having saved them, who bow to her in an unprecedented honor. While she accepts the crest of the Emperor and the sword of Shan Yu as gifts, she politely declines his offer to be his advisor, and asks to return to her family. Mulan returns home and presents these gifts to her father, who is overjoyed to have Mulan back safely. Having become enamored with Mulan, Shang soon arrives under the pretext of returning her helmet, but accepts the family’s invitation to stay for dinner. Mushu is reinstated as a Fa family guardian by the ancestors amid a returning celebration.