Celestial Avenue is a dead-end lane that runs north off Little Bourke Street in Chinatown, between Swanston and Russell streets. It was first known as Celestial Alley, and was originally occupied in the 1840s by tradesmen with Anglo Saxon names. By 1860, it contained many Chinese boarding houses, and a wholesale coffee dealer named William Sawden. The avenue was named for its Chinese residents, as 'Celestial' was a term commonly used in European colonies of the nineteenth century to refer to Chinese immigrants, the sons of China's Celestial Empire. Chinatown was renowned for its putative immorality and debauchery, and residents suffered from unhygienic conditions.
In 1892, some charitable ladies opened a school for the Chinese children of Little Bourke Street, the school being reached through a back entrance in Celestial Avenue. A letter to the City of Melbourne described the terrible danger of the ladies' charity. Three of the young teachers at the school contracted typhoid fever, one fatally, and this 'caused us a fear that there may be something defective in regard to the drainage [in Celestial Alley]'. The inspector, however, found that the disease 'must have been contracted elsewhere'. In the later twentieth and early twenty-first centuries, the lane included a Chinese newspaper office, a herbalist, restaurants and storerooms.