(3787, 35 km E, Yarra Ranges Shire)
This small hamlet is situated in the higher Dandenong Ranges, between Ferny Creek and Olinda. During the 1890s a village settlement scheme was located nearby to help alleviate the effects of the depression. Ambrose Eyles, an immigrant English chemist, is credited with first discovering the sassafras trees in this vicinity, from which its name is taken. Though until recently the postmark showed 'Sassafras Gully', the area has been known as Sassafras since 1917.