From wholesale fruit and vegetable market in the 1850s to general second-hand market in the 20th century, the Eastern Market was in its 19th-century heyday the centre of Melbourne's Saturday night social life. A general market opened in 1847 on a site reserved for public use in the 1837 town grid plan, with frontages to Bourke, Exhibition and Little Collins Streets. In 1857 a government grant of £3000 to the Melbourne City Council enabled the construction of new market buildings. In 1858 the market's area was extended to include the site of a previous female gaol. Four new sheds or arcades running parallel to Exhibition Street were opened in 1859, with further extensions completed in 1865.
The sale of fruit, vegetables and poultry on market days (Wednesday and Saturday mornings) saw the Eastern Market take over from the Western Market as Melbourne's principal growers' market. After 10 a.m. it was given over to the sale of hay, resuming the function of the old Hay and Corn Market at the corner of Flinders and Swanston streets.
Following a competition in 1876, a new two-storey building designed by Reed & Barnes was opened on 22 December 1879. The new market comprised shops on the Bourke and Exhibition street frontages, and butchers on Little Collins Street, with the main market building on two levels lit by day by a glass roof. The new building was inaugurated with a Juvenile Industrial Exhibition, but the interruption occasioned by rebuilding, together with the rise in importance of the Queen Victoria Market, saw its decline in significance as a wholesale market. Hay-growers had moved to the Flemington Road Haymarket in 1874, and after 1880 the Eastern Market became renowned as a general market and amusement centre.
In the 1860s it was established as a people's forum, the site of open-air services, meetings, lectures and political demonstrations, where rival stump orators played for the crowd's attention. As 'Paddy's Market' at least from the early 1860s, Saturday nights saw the sale of every conceivable commodity, from dairy produce, meat, salt fish and cabbages, to brooms, crockery, clothes, drapery, haberdashery, books, fancy goods and soap. Famed for its confectionery stalls, the market offered all manner of entertainment in carnivalesque profusion. Peep-shows, hoop-las, shooting galleries and sideshows competed for attention with phrenologists, quack doctors and dentists. Fabulous characters like Charlie the Tattooman and Madame Zinga Lee the famous fortune-teller rubbed shoulders with Cheap Johns and Punch and Judy shows. In 1862, the cries of spruikers and dealers and the noise of brass bands made up 'one terrific din and grotesque Pandemonium'.
The market's second-hand dealers of pets, gramophones and music continued the daily sale of cheap merchandise into the 20th century, but the Saturday night revellers had long been lured away by other Bourke Street amusements. By the early 1950s popular lament could only regret its decline and reminisce on the glory days of the Eastern Market, where E.W. Cole of Cole's Book Arcade had run his first bookstore, where the Eastern Market Tragedy was a sensation of the 1890s (when astrologer 'Professor' Medor shot show-business personality Frank Cartwright), and where C.J. Dennis' Sentimental Bloke met Doreen. Demolition began in May 1960. The foundation stone dated 9 May 1878 and a time capsule recovered by Whelan the Wrecker were installed in the Southern Cross Hotel, which was built in the market's place.