Barbie stars as Blair Willows, a waitress who lives in the city of Gardania. She takes care of her sickly adoptive mother and younger sister.
One day, after working, Blair realizes that she has won a lottery to be enter "Princess Charm School". It is Emily who puts her name on the lottery. With the support of her mother and her sister, Blair goes to "Princess Charm School."Blair makes new friends with another princesses, sporty Hadley and musical Isla. She even has a sprite named Grace as her personal assistant. However, another student, Delancy Devin, does not like Blair because she is an ordinary girl and so clumsy. Meanwhile, Dame Devin, Delancy's mother who is also a teacher in the school, wants to get rid of Blair because she is like Queen Isabella who died several years ago because of car crash. As Queen Isabella's sister-in-law, Dame Devin only wants her daughter to be the Princess of Gardania.
In Princess Charm School, Blair works hard under the supervision of the principal, Miss Privet. Finally, she can behave as a true princess.
In the winter, students from Prince Charming Academy comes to dance with Princess Charm School students. Blair dances with Prince Nicholas.
One day, the Princess Charm School students are going to visit the royal palace. In the palace, Blair finds a picture of Queen Isabella who is so like her. Then, she comes to believe the rumor about the princess is not dead in the car crash. When Dame Devin reveals that if Delancy is crowned, the area where Blair's family live will be bulldozed. Then, Blair determines that she must get the princess crown to prove that she is the true princess and saves her family. When the the rightful heir wears the crown, it will shine.
After working hard to get the crown, finally Blair proves that she is the true princess. Dame Devin claims that she eliminated Queen Isabella so that Delancy can be a princess. As a result, Dame Devin is arrested. Finally, Blair brings her family to palace.