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The first European settler in St Kilda was Benjamin Baxter in around 1839. He was a settler from Melbourne on a grazing lease. In 1840, St Kilda was the home to Melbourne's first quarantine station for Scottish immigrants.
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St Kilda was named by Charles LaTrobe after the schooner Lady of St Kilda, which was owned between 1834 and 1840 by Sir Thomas Acland.
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The first block was bought by James Ross Lawrence, who had been master of the Lady of St Kilda until 1842. Lawrence had now settled in Melbourne. His block was bounded by three unmade roads. One of these roads he named Acland Street after Thomas Acland, who had been his employer until 1840 but who had never been to Port Phillip District. The remaining two became Fitzroy Street and The Esplanade.
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Railway lines brought many visitors to St Kilda and increased patronage to the privately run sea baths, the jetty promenade and the St Kilda Cup, cricket and bowling clubs were formed in 1855.
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By the mid-1860s St Kilda had about fifteen hotels including the George, formerly the Seaview.
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During the Land Boom of the 1880s, St Kilda became a densely populated district of great stone mansions and palatial hotels, particularly along the seaside streets such as Fitzroy Street, Grey Street and Acland Street the area once known as St Kilda Hill centred between Wellington Street, Alma Road, former High Street (incorporated as part of St Kilda Road) and Chapel Street.
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St Kilda's population more than doubled between 1870 and 1890 to about 19,000 people.
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Cable tram lines were opened in 1888 and 1891 to run from the Melbourne central city area along St Kilda Road to St Kilda Junction and then branch out along Wellington, High and Fitzroy Streets.
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During the Depression of the 1890s, however, St Kilda began to decline. Many wealthy families had lost much of their fortunes and several of the large mansions were subdivided for apartment or boarding-house accommodation.
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The first sea baths were opened in 1860 and rebuilt in 1910 to replace the 1862 "Gymnasium Baths" and have been rebuilt several times since. They closed in 1993, leaving only the front facade.
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Luna Park opened 13th of December, 1912, after two years of construction. It park was developed by American showman J D Williams.
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Designed by Henry E. White and built in 1927, it is one of the few early 20th century picture palaces to survive in Australia, and is included on the Victorian Heritage Register. It is a major local landmark, and an important part of the early 20th century development of the St Kilda beach foreshore as an entertainment precinct.
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Several cabaret venues emerged. Leo's Spaghetti bar and gelateria was opened for the Olympics in 1956 by an Italian migrant as one of Melbourne's first Italian restaurants and quickly became a Melbourne establishment.
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This caused the prices of renting properties in St Kilda to soar, which drove people out of the area
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During a 6 year period between 1993 and 1999, the St Moritz hotel, the Novotel Bayside and Novotel St Kilda were opened
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On 11 September 2003, the St Kilda icon, the 99-year-old pier kiosk burned down in an arson attack.
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In 2015, businesses and residents became more concerned at the downturn of Fitzroy and Carlisle Streets because of crime, violence, haphazard development and traffic gridlock.
