A mermaid, or a merman, or to be gender neutral merfolk,  have the head and torso of a human being, and the tail of a fishy. The first mermaid came to be when she was in love with a human shepherd, and somehow ended up killing him. Ashamed of her actions she took a dive in to the water, which would not fully consume her beauty, therefore she was turned into a mermaid.

But to answer our friends question to ariel…

Females have human internal reproduction organs; however the vagina is slightly shorter, and the common urogenital opening (the urethra merges with the vaginal canal near the opening) is at the front. The opening can stretch as much as a human vaginal opening; mermaid babies are born live (as opposed to hatched from eggs). A clitoris (which is the same color as the tail) is slightly below the
urogenital opening, and an anus is above the urogenital opening. Mermaid vaginas are slightly smaller than human ones (since male mermaid penises are smaller, explained below), so they tend to be more sexually satisfying to human males.

Males do have a penis, but it is almost as small as a human female clitoris and is the same color as the tail; it is hardly visible (this is the only plausible explanation to why no one has ever seen a penis on any of the male mermaids). It is used for urination, as well as sexual intercourse. The testicles are
inside the tail, as opposed to the pelvis, since they require a slightly lower temperature to function properly (the human and pelvis part is warm-blooded, but the tail is cold-blooded). The anus is above the penis.