While religious belief sustained Melbourne's European settlers through the trauma of immigration, religious allegiances shaped the way they formed identities for a new society and created new institutional structures. In a pluralist society, where English found themselves marrying Irish and Scots, and rural people found themselves marrying city people, religious allegiance became a marker of ethnic origin and personal identity rather than of theological distinctiveness. The importance of 'one's church' to a person's sense of self gave Australian sectarianism an edge and a longer life than it had anywhere in the United Kingdom other than Northern Ireland.
The balance of religious allegiances was determined by succeeding patterns of immigration and settlement. Victoria was similar to New South Wales in its higher proportion of Catholics, but different in its strong representation of Presbyterians. Nominally Anglicans were the dominant church affiliation until the 1971 census, when Catholics overtook them, but their actual church attendance was always the weakest of all the Christian denominations.
Presbyterians increased their representation in the gold decade, but while many settled in Western Victoria, the Presbyterian Scots assumed a profile in the Melbourne elite that was unique among the Australian colonies. Highland Scots were more commonly members of the Free Kirk or even Catholics, and tensions between Highlanders and the more educated, prosperous and worldly Lowlanders infected Victorian Presbyterianism. Middle-class Presbyterians mocked 'Wee Frees', while conservatives remained ever vigilant for heresy, culminating in the forced resignation of the Rev. Dr Charles Strong from Scots' Church, Melbourne, in 1883. Melbourne Presbyterianism suffered a blow to its esteem in the disgraces of too many of its leading laymen who were implicated in the crash of the 1890s.
Methodism grew also from the gold rush, and while Bendigo and Ballarat remained more Methodist than Melbourne, many Methodists did move to the metropolis in the pursuit of work and betterment. As Methodists profited from self-discipline and self-denial, they became more middle-class and built impressive redbrick churches in the eastern suburbs, the Auburn edifice being among the most interesting. But in the northern suburbs they remained a force until World War II, with churches such as the Brunswick circuit running huge Sunday schools, sporting clubs and community groups. Cornish immigrants and former miners working in the quarries and brickworks of the inner north provided a radical political subculture, which endured into the early 20th century and shaped future Labor politicians and trade union activists. Methodists were the keenest Sunday school attendees of all Christian denominations; they were proud of their Englishness (to the extent that Ulster Methodists refuse to this day to identify as Irish), and often came to abandon the Australian Labor Party as 'too Catholic'. Teetotalism was a touchstone of church loyalty and personal rectitude, and organised teetotalism was able to control the sale and consumption of alcohol in a number of eastern suburbs. The last 'dry area', Ashburton, was released from sobriety by a local vote in 2003.
Catholics made a profound mark on Melbourne life, politics, sport and culture. The first four decades of the colony's history saw people making their own decisions about whom to marry and whether to practise religion, to the extent that the church feared it was losing its flock. The resulting development of the separate Catholic education system and the importation of teaching religious orders from Ireland reinfused Melbourne Catholicism with Irish sentiment and culture. Much of the Hibernian colour of Melbourne Catholicism was thus a second-wave Irish sentiment, rather different from the outlook of the earlier Irish immigrants, who had been eager to assimilate. The protracted incumbency of Archbishop Daniel Mannix deepened the identification with Ireland just as immigration from Ireland dwindled. The association of Irish with Catholic, and of Catholic with working-class, overshadowed the significance of the Protestant Irish in colonial Victoria and the extent of the Catholic middle class and elite. (Many have said that the conscription referendums of World War I drove middle-class Catholics into the Labor Party and working-class Protestants out of it.) Isolated by its increasingly under-resourced school system, Melbourne Catholicism exhibited a ghetto mentality of separatism and discrimination. Melbourne evolved into two cities, Catholic and Protestant, where from birth, through education, work, marriage, hospitalisation and death, one need never cross the threshold of an institution of 'the other faith'. The 1955 Labor Party split was both a consequence and an irritant of the sectarian prejudice that flourished on both sides of the divide. Only with the Second Vatican Council did this undeclared civil war of words and manners fade. Catholic allegiance declined after the papal encyclical forbidding oral contraception, and attendance at mass by the Australian-born was declining significantly by the 1980s, alongside a growing shortage of priests and religious.
Sectarianism also faded from the Protestant side. Church 597 attendances held up in the suburbs after World War II but suddenly collapsed in the second half of the 1960s. It was not only the young who found themselves drifting away from organised religion, but also many of their parents, who realised that their religious lives were based on habit rather than a living faith. Methodism suffered acutely, with churches that had been full three times a Sunday in the 1920s now attracting fewer than 20 regular attendees. The Protestant churches found themselves sharing a faith from which doctrinal differences had almost disappeared. In 1977 the Presbyterians, Methodists and Congregationalists formed the Uniting Church, with only a sector of continuing Presbyterians remaining distinctive.
Melbourne Anglicanism had never been as evangelical or as conservative as in Sydney, containing a significant High Church sector, often associated with strong commitment to social issues. The Brotherhood of St Laurence's work gave the church a respected social-welfare profile. The Salvation Army had prospered in its early years and similarly retained public esteem as a leading provider of care to those in need.
Immigration again changed other religious allegiances. The early Jewish community was small, assimilationist and generally of Sephardic origin. The Holocaust brought European Jewish refugees to Melbourne, creating the largest community of Holocaust survivors outside Israel. While Reform Judaism flourished, more Orthodox practices have grown in recent years along with the revival of Orthodox Judaism and Hasidic practice in Israel and the USA. Other immigrants brought the Christian Orthodox rite to Melbourne; Islam is one of the fastest growing new religious allegiances; Buddhism is growing more slowly because many immigrants from South-East Asia are active Christians. The contribution of Catholicisms other than Irish has enriched the Church and made Catholicism the largest single denomination in Melbourne.