Prostitution has been a persistent, if elusive feature of Melbourne's street life, seen as a problem by those who seek to police the practice or reform the practitioners, but as a necessity by its defenders, who describe the practice as sex work. The gender imbalance among gold-rush immigrants produced a tolerance of prostitution, which diminished as the city became more respectable. While moral reformers campaigned to prevent female immigrants 'falling into vice', a highly visible brothel district developed in the north eastern sector of the city. Police pursued a policy of containment, keeping prostitutes out of respectable residential areas while allowing them to operate comparatively freely in the slums. At a time when respectable women were never seen unaccompanied on the streets of the city at night, the 'public woman' was an easily recognised figure, soliciting custom in bars and theatres before retiring to nearby hotels, where willing landlords offered short-term rates. At the top of the trade were the 'dressed girls' employed by high-class brothels such as Madame Brussels' in Lonsdale Street or by discreet establishments operating in more respectable suburbs.
Female rescue organisations, constituting prostitutes as victims, offered shelter and retraining to the penitent. Although they focused on young women, their greatest success was with the old and broken-down, who no longer had great currency on the streets. Women's movements sought to redefine the 'problem' in terms of the unrestrained male sexuality that created the demand. The strengthening of legislation in response to such campaigns between 1890 and 1915 allowed police to take more decisive action, harassing brothel owners and street-walkers and forcing them out of the city, creating new concentrations in Fitzroy, Collingwood and St Kilda. In these locations, apart from street policing and occasional campaigns in response to fears about venereal disease and the criminal rackets associated with brothels, the trade was left undisturbed.
Acting on the recommendations of the 1985 Neave Inquiry, the Prostitution Regulation Act 1986 legalised brothels, breaking with the earlier policy of containment and provoking fears that 'massage parlours' would proliferate in residential areas. The Act has been criticised by women's groups because it limits sex workers to working within male-controlled parlours while continuing the criminalisation and the consequent vulnerability of women who choose to work the streets. Such debates, however, have brought the issue of prostitution into public discourse, allowing for discussion of previously silenced issues such as male prostitution, drug use and dependency, and sexual abuse, and have facilitated the development of support groups and trade union membership for sex workers.