“The Water Horse: Legend of the Deep” is the rare movie that is truly entertaining for the entire family. At times it seems like two separate movies, as it couples a complex family drama with a whimsical slapstick comedy. Director Jay Russell manages to blend the two, however, to create a charming film that presents a magical story in a way that seems true and thoughtful.

Based on the book by Dick King-Smith, “The Water Horse” presents an explanation for the legend of the Loch Ness Monster that begins with a lonely little boy living near the lake during World War II. Young Angus is having difficulties coping since his father went off to serve in the Royal Navy. His mother is well meaning but is busy with her job as housekeeper on a large estate and is dealing with her own sense of loss. As a result, the boy has become withdrawn and lost.

One day Angus comes across a mysterious egg that eventually hatches a baby water horse, and taking care of the orphaned creature he names Crusoe offers the boy friendship and responsibility. Soon, however, the arrival of a platoon of soldiers at the Loch to guard the area from possible German espionage and invasion makes it more important and more difficult for Angus to keep the water horse a secret. As Crusoe grows, the necessity of moving the creature into the nearby Loch eventually leads to danger for both Crusoe and Angus, and gives rise to the legend of the mysterious monster.

Previously featured in the film “Millions,” young Alex Etel is perfect in the role of Angus. As Angus bonds with Crusoe, he becomes both friend and parent to the rambunctious creature. This relationship is the first real connection the boy has experienced in a long time, and it changes his life. In order to protect Crusoe, Angus must confront his own demons, and demonstrate courage and compassion and loyalty. Etel has a fresh-scrubbed, freckle-faced, innocent look that is just right for this period piece, and he is able to combine a quiet gravity with a surprising enthusiasm that is necessary for the role. The film demonstrates the importance of family, as Angus learns to trust and becomes closer to his mother and his sister, and he learns tolerance as he befriends the mysterious handyman, Lewis Mobray.

The rest of the cast matches the quality of Etel’s performance. Emily Watson manages to show that Mrs. MacMorrow’s stern exterior masks a deeply wounded interior, and it is clear that she only wants what is best for her children. As the handyman with more of a past than he wants to admit to, Ben Chaplin keeps the glowering to a minimum and the sympathetic, practical help to a maximum as he gets involved in Angus’s predicament. David Morrissey is saddled with a rather simplistic character as Captain Hamilton, the commander of the troops, but even he manages to make the stuffy soldier interesting by the end of the film. Priyanka Xi is charming as Angus’s sister.

Much of the filming of “The Water Horse” took place in New Zealand, with some shots around the estate completed in Scotland, and the stunning scenery plays a major part in the film. Crusoe is a creation of New Zealand as well, as the water horse was created by Weta Digital and Weta Workshop, the group responsible for the effects in the “Lord of the Rings” trilogy, “King Kong,” and “The Chronicles of Narnia.” The creature on screen has a distinct personality and a look that evolves as he grows, which makes it easy to accept the fantastical story. In addition, he prompts some physical comedy that adds to the humor of the movie, especially for the younger members of the audience.

Possibly the only misstep in the film is the use of a narrator, which brings the story into the present day. This seems a little contrived and unnecessary. Apart from this framing device, though, the story is nicely paced.

One of the best qualities of “The Water Horse” is how real it seems. For a story about a mythical creature that turns into a legend, the action and the characters of “The Water Horse” seem real and true, and this is due in no small part to the positive relationships forged between the characters, whether they are human or creature.