The metropolis of Melbourne, like most others in the Western world in the second half of the 19th century, saw the establishment of picture dealers and commercial art galleries within its city centre. Many of these were branches of artists' suppliers and framemakers, such as Buxton's Artistic Stationery Co. in Swanston Street where the 9 x 5 Impressionist Exhibition was staged on the first floor in 1889. As Melbourne's wealth increased, especially during the 1880s, a number of international art dealers established temporary branches in Melbourne: Koekkek & Co. specialised in German art, while London's fashionable Grosvenor Gallery sent out exhibitions of British art. All evaporated without trace in the long depression that began in the early 1890s and virtually killed the art market. It made only a gradual recovery in the years before World War I, with only one gallery space outside the National Gallery of Victoria, and that was the Melbourne Athenaeum. This was actually part of one of the colony's oldest institutions, the Melbourne Mechanics Institute in Collins Street (founded 1839) where a first floor had been added in 1886 divided between a gallery and a museum.
Local dealers gradually came back to the game in the postwar years; S.H. Gill established the Fine Art Society Gallery at 100 Exhibition Street in 1918 and the Sedon Galleries opened in a space above Robertson & Mullens bookshop in Elizabeth Street in the early 1920s. Decoration Galleries operated in Collins Street for four years from 1920 to 1924 before being rocked by the scandal of police intervention at an exhibition of Norman Lindsay etchings. The Joshua McClelland Print Room opened in 1927 as the Little Gallery in Little Collins Street and moved to 81 Collins Street in 1935, specialising in early Australian art, furniture and silver. Of all these galleries, this is the only one still operating.
The war years saw an unprecedented growth in the creation of and interest in local art. It was served by rather primitive exhibiting conditions such as at Tye's Gallery, a large basement space at the rear of a furniture store in Bourke Street, founded in 1945. Artists usually managed their own exhibitions there but this changed in the postwar years with the establishment of the Stanley Coe Gallery in Bourke Street in 1950 which, taken over by Peter Bray the following year, exhibited managed exhibitions of contemporary local art. In 1953 French émigrés Georges and Mirka Mora established Mirka's Gallery in Collins Street, attracting young bohemian artists. John Reed established the Gallery of Contemporary Art in 1956, which became the short-lived Museum of Modern Art and Design of Australia in 1958 with exhibiting space at Ball & Welch Department Store in Flinders Street where Arthur Boyd first showed his 'Bride' series.
By the late 1950s contemporary Australian art was becoming highly marketable and a rush of new commercial galleries were established including Australian Galleries in Collingwood in 1956 showing Fred Williams, Gallery A in South Yarra in 1959, South Yarra Galleries in 1961 and Leveson Gallery in 1962. The late 1960s saw this activity intensify, each new gallery vying to be seen as more avant-garde than the rest. In 1967 Georges Mora moved from the city to St Kilda, where he opened Tolarno Gallery and in 1980 he moved again to River Street, South Yarra. Other new establishments at this period included Sweeney Reed's Strines Gallery founded in 1966 in Carlton, and Powell Street Gallery in South Yarra in 1969. Perhaps the most influential of them all, Bruce Pollard's Pinacotheca - it represented a new generation of artists including Dale Hickey, Robert Hunter, Peter Booth and Robert Rooney - was initially established in St Kilda in 1967 and moved to its Richmond warehouse three years later.
The 1970s and 1980s saw public institutions attempting to match the commercial world in a perceived commitment to contemporary art. The University of Melbourne Art Gallery was established in 1972 showing a blend of contemporary and historical art, but its transformation into the Ian Potter Museum of Art (opened 1998) increased its commitment to the exhibiting and interpretation of contemporary art. Monash University founded an Exhibition Gallery in 1975 and under University patronage took over the running of the Australian Centre for Contemporary Art (ACCA) in the Kings Domain in the later 1980s. ACCA is now an independent institution housed at Southbank. After the death of John and Sunday Reed, the State Government bought their premises Heide in suburban Bulleen and funded its transformation into the Heide Park and Art Gallery, which opened in 1981. Now self-funded, it has transformed itself into the Heide Museum of Modern Art and continues as a site of innovation and interpretation of the modern.