The story tells of a fish with shiny, multi-colored scales named Rainbow Fish. He is always fond of his scales. But one day, a small fish asks him if he could have one. Rainbow Fish refuses in a very rude way. The other fish are really upset about his behavior and don't want to play with him anymore.
Feeling upset, his only friend left, the starfish, tells him to go visit the mysterious octopus for advice. Rainbow Fish finds the octopus and asks what he should do. The octopus tells him that he must share the beauty of his scales with his friends.
When he encounters the small fish a second time, the Rainbow Fish gives her one of his precious scales and, seeing the joy of this little fish, feels immediately much better. Very soon Rainbow Fish is surrounded by other fish requesting scales and he gives to each of them one of his shiny scales.