Communism was a component of Melbourne's radical culture for more than half a century. A branch was formed upon the establishment of the Communist Party of Australia in 1920, but made little headway: its marginal status in 'dour, hushed Melbourne' during the postwar decade is evoked by Judah Waten in his novel Scenes of revolutionary life (1982). The depression brought an influx of younger members attracted by the party's turn to stridently oppositional street politics. Membership grew from less than 100 in 1930 to more than 1000 by 1936. As the unemployed activists found jobs in the recovery, the party achieved growing influence in the trade unions. Communism also appealed to those concerned by the rise of fascism and its threat to peace: thus the Movement Against War and Fascism organised the national anti-war conference that brought the international publicist Egon Kisch to Melbourne in 1934 and, after the Commonwealth Government's unsuccessful attempt to prevent his entry, attracted overflow crowds at the West Melbourne Stadium. The Workers Art Club, the New Theatre and a thriving youth organisation all developed from this ambience. A weekly newspaper, the Workers Voice, was established in 1933 (in 1939 it became the Guardian) and the International Bookshop was joined by a growing number of suburban bookshops.
Enthusiasm for the Red Army, which turned Hitler's invasion of the Soviet Union, saw party membership peak in the closing years of World War II. There were perhaps 4000 members in Melbourne, and communists led some of the largest unions. At the University of Melbourne more than 100 communists, including Ian Turner and Stephen Murray-Smith, worked through the Labour Club to dominate student politics. The Communist Party headquarters were in Sydney, and the national leadership's criticism of the Melbourne comrades became a recurrent motif. More than their counterparts in Sydney, members here entered into the civic and cultural life of the city and struck root in its progressive traditions; the comprehensive historical writings of Ralph Gibson illustrate this orientation. Communism had major cultural influence through artists such as Noel Counihan and writers such as Alan Marshall.
The onset of the Cold War quickly checked this popularity. The defection of a state official, Cecil Sharpley, and his allegations of industrial sabotage and union ballot-rigging brought a royal commission, conducted by Sir Charles Lowe, in 1949. The anti-communist Movement began to win control of previously left-wing unions. While the party survived Robert Menzies' attempt to ban it in 1951, it was damaged by the allegations of the Soviet diplomat Petrov and the revelations of Stalin's crimes by the Soviet leader Khrushchev in 1956, which alienated most of its middle-class intellectual membership. It entered into a protracted decline, exacerbated when the followers of the local leader Ted Hill broke away to form a pro-Chinese party in 1962. There was a temporary revival in the student New Left later in the decade. Under the new leaders, Bernie Taft and John Sendy, the party in Melbourne sought to develop a more moderate politics than the Sydney leadership, and when they failed they too defected to form the Socialist Forum in 1984. The dwindling Melbourne adherents wound up the party in 1991.