Located between Swanston and Russell streets, Royal Lane extends from Bourke to Little Collins streets. It possibly received its name from the nearby Royal Mail Hotel, which was on the corner of Bourke and Swanston streets, or else from George Coppin's Theatre Royal. In 1860, Royal Lane was a lively place and host to both commercial and social life. Businesses that occupied the lane included boot makers, chimney sweeps, jewellers, dining rooms and the 'City Buffet' coffee house and restaurant.
By the late nineteenth century, however, Royal Lane became less pleasant to visit. The City of Melbourne received numerous complaints from its occupants, often relating to smelly water left to flow through the lane or dense smoke and dirt being emitted from chimneys belonging to nearby theatres and hotels, of which there were many.
One particularly colourful case was described by E.W. Lampriere on 13 August 1892. Lampriere complained of 'a double row of men' who had been using Royal Lane, on which the stage door of the Gaiety Hall was situated, as a urinal. 'Nightly the young girls engaged there are forced to run the gauntlet of this double row of men, who instead of trying to hide their beastliness, seem to glory in it, and either take no notice or else make low insulting remarks as the girls pass.' Lampriere added: 'The case is the more flagrant from the fact that a few yards higher up the lane, there is a public urinal'.