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An armed conflict forces Pedro and Alma Madrigal, a young married couple, to flee their home village in Colombia with their infant triplets Julieta, Pepa, and Bruno. The attackers kill Pedro, but the candle of Alma magically repels the attackers and creates Casita, a sentient house for the family located in Encanto, a magical realm, bordered by high mountains.

Fifty years later, a new village thrives under the candle's protection, and its magic grants "gifts" to each Madrigal descendant at the age of five which they use to serve the villagers. However, Bruno, vilified and scapegoated for his gift of seeing the future, disappeared ten years earlier, while Julieta's youngest daughter, 15-year-old Mirabel, had mysteriously received no gift.

On the evening when 5-year-old Antonio gains the ability to communicate with animals, Mirabel suddenly sees Casita cracking and the candle's flame flickering, but her warnings go unheeded when Casita appears undamaged to the others. After overhearing Alma praying, Mirabel resolves to save the miracle's magic. The next day, she talks to her super-strong older sister Luisa, who confesses to feeling overwhelmed by her near-constant obligations then suggests that Bruno's room, in a forbidden tower in Casita, may explain the phenomenon.