The series takes place on the Millhouse island of Illoka. The islanders survive without the use of modern technology, because bamboo and grass doesn't generate electricity, building huts out of bamboo and fern and eating various fruits found on the island floor. Beneath the surrounding ocean lies Quetso, a sunken Millhouse island now home to many sea creatures. Quetso is now ruled by Flipper's parents.

During season 3, Flipper and Lopaka discover that Quetso was sunk long ago when King Dextorian brought Neptune's Statue and Trident to the surface. At the same time a sea volcano was set off, sinking Quetso and forming Illoka. The curse of Neptune's Trident is still unleashed on Quetso, and Flipper and Lopaka have to sink the Statue to save everyone.

All seasons

Lopaka
Lopaka is the 11 year-old Polynesian boy, referred to in the show as a menehune, who has the power to converse with sea creatures, like his dolphin friend Flipper, and also breathe underwater. He was rescued by Flipper from drowning as a child, and they've been friends since. The islanders of Iloka often wonder where Lopaka disappears to, until the episode 'Secrets and Lies' where to help an injured Flipper, Lopaka must reveal his underwater secret. He wears a red islanders skirt, and an arm band, which all males wear on Iloka. Lopaka is a very loyal friend, to sea creatures and islanders alike.

Flipper
Flipper is a quick-witted, agile, loyal and friendly bottlenose dolphin, whose parents are the rulers of Quetzo. When trouble arises in the underwater city (usually thanks to Dexter), the citizens of Quetzo turn to Flipper for a plan. And he never fails them. Flipper has a white underbelly, with a light blue top. He is the most trusted person in Quetzo, and the biggest target for Dexter.

Dexter
Dexter is the giant octopus that is bent on ruling Quetzo. He is deceiving, manipulative and a downright coward. Many times has Flipper and Lopaka saved him from certain death, but only repays them by concocting a new plan to destroy Flipper. Dexter lives in a grotto in the outskirts of Quetzo, under Iloka. Although he praises himself for his 'excellence', Dexter isn't the brightest octopus around. But he should not be underestimated: when he really wants to, Dexter can be very devious. Unlike a normal octopus, Dexter only has six tentacles.

Serge
Serge is the brains behind most of Dexter's plans. He is a bright green coral snake, with a devious and sharp mind. Even though he is truly the brain of Dexter's troupe, Serge never is applauded by his master, but is something goes wrong, he is blamed.

Season 2

Professor Troy, Spike and Goose
Professor Troy is a talented scientist who wants to find out the history of Quetso and Illoka, and the reason that it sank. She is good hearted and her son, Spike, is friends with Lopaka and is surprised the Milihune can get along without 20th century essentials. He tries teaching them about it by playing along with them. Goose, Troy's off-beat assistant is a young man of few words; every time he speaks, he does so with an accent. For example, if he were to say "Help me!", he would say it slowly, in a low voice. He wears an aqua vest and jeans.

Season 3

Captain Barnibus Crab, Kim, Simon
Captain Crab is a short, modern-day pirate who has come to the waters of Illoka to search for Neptune's Statue and Neptune's Trident. His niece, 18 or so year-old Kim has come to assist him, and also gain pirating experience. Kim is an eager pirate, and is the technical wiz of the ship. Simon on the other hand, is a large deck hand/chef. He is accident prone, and will commit piracy, but he is really a gentle giant.

Ultra
Ultra is a pink dolphin, who was taken from her parents a baby. She grew up in a science lab, and was taken with the pirates to search the ocean floor. After a few incidents, Ultra proves herself a true, worthy companion, and Flipper gladly takes her into the group. Later in the series, Ultra finds her parents, along with a little sister, Delta.