The Sunken Treasure Ship first appears in the film when Ariel first spots it with her friend Flounder. Ariel wants to explore inside of the ship, but Flounder refuses. Ariel tells him to stay outside of the ship, and to watch out for sharks, but Flounder starts panicking and goes inside with her. They begin exploring the Ship, trying to find any treasure (human objects), while Ariel is feeling excited, Flounder is feeling scared. He screams while staring at a skeleton and bumps into a part of the ship, causing it to collapse, sending him swimming back to Ariel. The part had a hole to top floor, where Ariel finds two objects, a fork (called a Dinglehopper by Scuttle) and a pipe (called a Snarfblat also by Scuttle).
Suddenly, they are attacked by a shark, swimming away as fast as they could. Fortunately, the shark gets its neck stuck in the ship's anchor.
The Sunken Ship isn't seen again, until the climatic battle of the film, where it is seen floating back up to the surface. Prince Eric starts to climb up its ropes and sail it, ready to fight against Ursula. Eric sails towards her, the front being straight and pointed. It impales Ursula, causing her demise. She blew up with the ship, and Eric made it back to shore.