It was the discovery of gold in 1851 which attracted Chinese immigration to Victoria on a large scale. Ships sailed to Australia from Hong Kong with their cargo of men who had come in search of the "New Gold Mountain". The small but burgeoning Chinese community in Little Bourke Street provided for all the needs of the diggers - lodgings en route to the goldfields, food, equipment and medicine.

In the 1860s many Chinese district associations began to purchase land in little Bourke Street to build clubrooms which would serve as meeting places for the Chinese community. From the early 1870s until the early twentieth century, Chinatown experienced a stage of growth. For as gold dried up on the diggings, those who did not return to China went back to Melbourne's Chinatown which, for those who stayed, represented the only community they had. They found work and established businesses to cater for the local Chinese and non Chinese markets. The 1880s were the days of "Marvellous Melbourne", the time when industry was booming.

The new labor laws combined with the effects of the "White Australia Policy" introduced in 1901 plunged Chinatown into darkness. It was no longer the residential haven for the Chinese, as the population declined alongside business. When the government eased immigration laws in 1947 Chinatown revived itself once more, spreading its population over suburban Melbourne.