The observation that addition of a minute amount of flexible polymers to fluid reduces turbulent friction drag is well known. However, many aspects of this drag reduction phenomenon are not well understood; in particular, the origin of the maximum drag reduction (MDR) asymptote, a universal upper limit on drag reduction by polymers, remains an open question. This study focuses on the drag reduction phenomenon in the plane Poiseuille geometry in a parameter regime close to the laminar–turbulent transition. By minimizing the size of the periodic simulation box to the lower limit for which turbulence persists, the essential self-sustaining turbulent motions are isolated. In these ‘minimal flow unit’ (MFU) solutions, a series of qualitatively different stages consistent with previous experiments is observed, including an MDR stage where the mean flow rate is found to be invariant with respect to changing polymer-related parameters. Before the MDR stage, an additional transition exists between a relatively low degree (LDR) and a high degree (HDR) of drag reduction. This transition occurs at about 13%–15% of drag reduction and is characterized by a sudden increase in the minimal box size, as well as many qualitative changes in flow statistics. The observation of LDR–HDR transition at less than 15% drag reduction shows for the first time that it is a qualitative transition instead of a quantitative effect of the amount of drag reduction. Spatio-temporal flow structures change substantially upon this transition, suggesting that two distinct types of self-sustaining turbulent dynamics are observed. In LDR, as in Newtonian turbulence, the self-sustaining process involves one low-speed streak and its surrounding streamwise vortices; after the LDR–HDR transition, multiple streaks are present in the self-sustaining structure and complex intermittent behaviour of the streaks is observed. This multistage scenario of LDR–HDR–MDR recovers all key transitions commonly observed and studied at much higher Reynolds numbers.