The Islander (Rylant novel)

The book follows Daniel, whose parents have died; he goes to live with his grandfather on a remote gray island off British Columbia. Together they live an extremely lonely life, hardly talking to anyone. That loneliness soon lifts from Daniel when he meets a mermaid. He returns to the shore later, hoping to meet her again, but instead finds a sea otter, who then tosses him a seashell which contains a key. As he explores the mysteries of the key he soon grows closer with his grandfather.

• The Islander title listing at the Internet Speculative Fiction Database