The Mysterious Lake is an underwater adventure of ten-year-old twins Josh and Katie, who are searching for their neighbour's little terrier, Miffy. By accident, they fall into Otriana, an underwater world, and meet Nepta, a boy about their own age, and his sister, Coralie, who is much younger. With Nepta's help, they escape Otriana via a volcano which spurts water.
Katie is injured and has terrible nightmares following her adventure. The pool of water disappears but is located in another area. The twins' parents, along with Miffy and her owner, travel to the new location of Otriana and are enticed into the water. They meet up with Nepta's father, Bragh, who is a violent man. Wizen, a magical merman, helps them. There are many adventures before all the earthlings can escape.