This Catholic women's religious order was founded in Dublin in 1831 by a wealthy middle-class woman, Catherine McAuley. The order assisted underprivileged young people and was brought to Perth in 1845, then Melbourne in 1857, by one of McAuley's former novices, Mother Ursula Frayne. Bishop J.A. Goold offered them a house, with mortgage, in Nicholson Street, Fitzroy, from which they established schools, an employment bureau for domestic servants and an orphanage.
From Fitzroy, communities expanded to Emerald Hill, 663 Mornington and rural locations. Gradually the order spread into Melbourne's suburbs, where Mercy schools became central to the Catholic education system. In 1909 Mercy Teachers' Training College opened at Ascot Vale, on a campus later incorporated into the Australian Catholic University. After the 1919 influenza epidemic, the sisters opened a private hospital in Malvern, followed by the Mercy Hospital in 1934 and the public Mercy Hospital for Women in 1971, both in East Melbourne. The Mercy Hospital at Werribee was opened in 1994. United with Mercy congregations throughout Australia since 1981, in 2004 the Melbourne congregation had 310 professed members.