Mia Thermopolis (ANNE HATHAWAY) is a social awkward teen who lives with her artsy single mom, Helen (CAROLINE GOODALL), and is invisible to most everyone at her San Francisco high school except her best friend, Lilly Moscovitz (HEATHER MATARAZZO) and her brother, Michael (ROBERT SCHWARTZMAN). Wishing she could be the girlfriend to Josh Bryant (ERIK VON DETTEN), the most popular boy in school, rather than Lana Thomas (MANDY MOORE), Mia realizes that's highly unlikely, especially when she can't get up the nerve to speak in public during a debate class.
All of that changes when her mom informs Mia that her grandmother, Clarisse Renaldi (JULIE ANDREWS), is in town with big news for her. Arriving at the Genovian embassy, Mia meets Clarisse and her assistant, Charlotte Kutaway (KATHLEEN MARSHALL) and discovers that not only is Clarisse the queen of Genovia - a small European principality - but also that Mia's late father - that she never met -- was the prince, thus making her a princess.
While Mia thinks all of this is a big joke, Clarisse informs the teen that if she doesn't accept the throne that's her birthright, Baron Siegfried von Troken (GREG LEWIS) and Baroness Joy von Troken (BONNIE AARONS) will take over rule of the country. Accordingly, Clarisse, her assistant Joseph (HECTOR ELIZONDO) and a flamboyant makeup artist (LARRY MILLER), attempt to teach Mia about the finer things in life and transform her into a poised and beautiful young woman.
From that point on, and as Mia tries to draw the attention of Josh while oblivious to the fact that Michael is perfect for her, she must deal with her sudden fame and decide whether to remain a typical 15-year-old or accept the responsibilities and duties of being a teenage princess.