Since the middle of the 19th century, theological education in Melbourne has shaped the churches throughout Australasia. Teachers in the major churches have contributed to the city's cultural and intellectual life. Fears of sectarianism led the University of Melbourne to exclude divinity, though a compromise was reached by permitting theological education for matriculated students in the university colleges. Attempts to obtain degrees by links with British and Canadian universities were unsatisfactory. Finally in 1910, Anglicans, Baptists, Congregationalists, Methodists and Presbyterians persuaded the Victorian Parliament to establish the Melbourne College of Divinity (MCD), with authority to award extramural postgraduate degrees. Catholics retained seminary education. Some other Protestant groups remained independent until given degree-granting status in the 1990s.
Until the 1960s, theological education was strongly traditional. Staff were mostly expatriate; libraries were small, and few graduates undertook higher degrees. The expansion of the churches, growth of pastoral and field education, and development of ecumenism brought radical changes. Some clergy returned to Melbourne with overseas doctorates and modified Protestant ministerial education. Catholic theological education totally changed after the Second Vatican Council. Latin manuals and monastic discipline were replaced by contemporary scholarship. In 1969 the formation of the United Faculty of Theology led to the Jesuits joining this ecumenical faculty. The Joint Theological Library that resulted is the best in Australia. Melbourne is now an important centre for theological research and internationally recognised publications, enhanced by partnership between the Catholic Theological College and Australian Catholic University since 1999, as well as by MCD being recognised as a Table B provider under the Higher Education Support Act 2003.
In 1972 the MCD admitted Catholics and the Churches of Christ and conferred an undergraduate degree, providing a model for ecumenical theological education in other States. Lay student numbers have increased, a trend with far-reaching consequences for Melbourne churches. Changes in tertiary education led both the University of Melbourne and Monash University to set up joint degrees with the MCD. Several other Melbourne theological colleges began degree programs through the Australian College of Theology or through State Government accreditation. Professional postgraduate degrees, developed in the 1990s, are another sign of the vitality of Melbourne's theological education system, as is the development of some online courses and co-operation with some Orthodox churches.