In 1835, a group of British settlers arrived in Australia, drawn by the rich agricultural potential of the area around Port Phillip Bay. Led by John Batman, a pastoralist and entrepreneur, they sought to establish a new settlement in what is now Melbourne. On August 30, Batman negotiated a treaty with the local Aboriginal tribes, securing land rights that allowed for the establishment of the new settlement. His agreement, known as the Batman Treaty, was among the first recorded dealings between European settlers and Indigenous Australians, although it would later be declared invalid by the colonial government. Batman's vision for Melbourne included plans for a prosperous trading hub, and he recognized the strategic importance of the Yarra River for transportation and commerce.

The settlement's growth was rapid, fueled by the influx of settlers and migrants attracted by the promise of agricultural success and economic opportunity. Melbourne's location on the bay offered accessibility for shipping and resources, which further enhanced its appeal. Over the ensuing years, the population ballooned as it became a focal point for the sheep grazing industry, which thrived in the region's vast grasslands. By the end of the 1830s, Melbourne was well on its way to becoming a major urban center in Australia.

Batman’s original settlement, however, was also marked by conflict. The repercussions of European settlement on the Indigenous population were severe, leading to dispossession and violence as settlers expanded their claims. Despite the promise of health and prosperity, the founding of Melbourne also initiated complex challenges that would shape the city and highlight deep-seated issues of colonialism and land rights in Australia over subsequent decades.