Melbourne, city, capital of the state of Victoria, Australia. It is located at the head of Port Phillip Bay, on the southeastern coast. The central city is home to about 136,000 people and is the core of an extensive metropolitan area—the world’s most southerly with a population of more than 1,000,000. In Australia it is second only to Sydney in population, and there is a good-natured rivalry between the two cities, to which geography and history have bequeathed diverse characteristics.