In a magical kingdom, the Queen wants to surprise her daughter, Princess Annika, with a birthday gift. When she opens the door to Annika's room, she discovers that Annika is missing, having gone to an ice rink without asking for permission. Out skating, Annika meets a small polar bear whom she names Shiver. When Annika returns to the palace, her parents are so worried and overprotective they forbid her from skating ever again. That night, Annika sneaks out of the palace to join a festival. A powerful wizard named Wenlock appears and asks the princess to marry him. When Annika refuses, Wenlock furiously tells the king and queen the fate of their "other daughter", which surprises Annika. Wenlock magically turns everyone into stone, but Annika is saved by Brietta, a flying horse, but Wenlock tells her that she has three days to marry him, otherwise the spell will be permanent. Brietta takes Annika to a castle in the clouds called the Cloud Kingdom. There Annika discovers that "the other daughter" of the king and queen is Brietta, who was transformed into a Pegasus by Wenlock when she refused to marry him (explaining why Annika's parents are so overprotective). Annika decides to build the "Wand of Light" to break Wenlock's spell. In order to accomplish this, they must have a measure of courage, a ring of love and a gem of ice lit by the fire of eternal hope. The Cloud Queen gives Annika a crystal bell to ring if she is in need of help. The group travels to the Forbidden Forest, where they meet a young man named Aidan who helps them after they get caught in a net. When Shiver and Annika fall into a giants stew pot, Annika tricks him into chaining himself to a post, and uses her hair ribbon to climb out. The ribbon is the same size as her, and as a measure of courage, it turns into a staff for the Wand of Light. After trading Annika's skates for a fake map, the group finds themselves in a large cavern filled with gems, where a sign tells them to take only what they need. Although they get 2 gems, Shiver causes a cave-in, which they narrowly manage to escape. As Aidan starts to forge the Wand, he reveals that he ran away from his parents and lost all of his money gambling. He wishes to return to them and ask for forgiveness. Brietta offers her tiara to make the ring of love. With all three objects, the "Wand of Light" is assembled, and Brietta transforms back into her human form. Brietta and Annika return to the Cloud Kingdom on two winged horses summoned by the Cloud Queen's bell, but Wenlock pursues them, hurting Brietta. Angered, Annika tries to use the Wand, but fails. Wenlock causes a snowslide, trapping Annika. Aidan helps to dig Annika out. Together, the trio go to Wenlock's place, where they engage him in battle. During the battle, the gem falls out of the Wand, but Aidan gives Annika his own. Realising how to work the Wand, Annika asks it to defeat Wenlock for the love of her family and friends. Wenlock turns back into his true form of a troll and the spell on Annika's parents is broken. Annika shows them Brietta and the entire family celebrates together, while Aidan's parents forgive him. The end scene shows the trio skating in the cloud palace. Both Aidan and Annika are wearing crowns, signifying that they have gotten married. Brietta remarks that they look happy, and gifts the Cloud Queen with the Wand, who replies that it will be the first star at night.