Gun Alley was located between Russell and Exhibition streets, extending south from Little Collins Street. It no longer exists. In 1895, the Paddington Hotel was situated on the corner of Little Collins Street and Gun Alley. By 1920, business located on the alley included two motor engineers and a printer.
Gun Alley is most well known for the Gun Alley Murder. On 30 December 1921, 12 year-old schoolgirl Alma Tirtschke was raped and murdered, her body found in Gun Alley the following day. She was last seen on the afternoon of 30 December near the Australian Wine Saloon, a small drinking establishment run by Colin Campbell Ross. Naturally the Melbourne community was shocked at such a brutal crime, and with pressure mounting to catch the killer, Ross was arrested and charged with the murder. The case against Ross was based on the evidence of two witnesses and the discovery of a red hair believed to be from Alma, which provided a crucial link between Ross and the murder. Despite maintaining his innocence, Ross was hanged at Old Melbourne Gaol on 24 April 1922.
Over the last decade researcher Kevin Morgan uncovered several flaws in the judicial proceedings, leading him to believe that Ross was in fact innocent. He organised a petition to have Colin Ross's conviction overturned posthumously. This 'petition of mercy' was signed by family members of both Ross and Alma Tirtschke, and led to an inquiry into the case. Forensic comparisons of the piece of hair comprising the vital piece of evidence revealed that it did not come from the victim. On 27 May 2008 Colin Ross was posthumously pardoned for the murder of Alma Tirtschke, 86 years after he was hanged.