Mermaids are a race of aquatic humanoids that inhabit the ocean, especially around the Island Nations. One of their favorite spots was the Deserted Island (later named Chiepoo Island or Lazlo Island) where they lived undisturbed. However this arrangement was disturbed when the Cray Trading Company began aggressively hunting mermaids for their skins. This made mermaid hunting a rather lucrative enterprise, although many individuals, such as Kika's pirates, frowned on the act.
During the Island Liberation War, five Mermaid sisters joined Lazlo's forces and opened an accessory shop aboard the Dauntless. The Mermaids involvement was minimal, but they later proved crucial by piloting three burning decoy ships into the Kooluk Navy before jumping ship and swimming back to the Dauntless. With the Kooluk threat minimized, the mermaids were free to resume their peaceful lifestyle, although the Deserted Island had now attracted a small population.