The eastern side of the area's metropolitan railway line and Charman Road north is located within the City of Kingston, while the suburb's western region towards extensive golf links, parks and Port Phillip Bay falls within the City of Bayside.

The Boon Wurrung people had used natural springs in the area and when European settlers arrived they established market gardens and orchards nearby.

[5] On the allotment he built a hotel, the Cheltenham Inn, named after his home town in England, and a publican's license was granted in 1854.

Cheltenham is the largest suburb in the municipality in terms of size and population and it contains the seat of local government.

Much residential development occurred in the second half of the 1940s after World War II ended and this growth continued into the 1980s.

[16] The Kingston centre is a large aged care and rehabilitation facility which opened on Warrigal Road, Cheltenham, in 1911 as the Melbourne Benevolent Asylum.

Sports played in the area include soccer, golf, cricket, Australian rules football, lawn bowls, baseball and swimming.

When it opened in 1968 it featured a small number of "anchor tenants", such as Myer and Woolworths, and dozens of smaller retailers, banks and cafes.

One such development was the construction of multi-level retail bridge across Nepean Highway linking to a newer three-level extension near the railway line.

DFO was originally built in 1992 as Fairways Market,[33] and it is a large shopping centre that contains up to 135 stores, mainly fashion outlets.

[34] Kingston Central Plaza, situated next to DFO, is also a new shopping precinct, which opened in 2008 and has 10 stores including: The Good Guys, Aldi and Sam's Warehouse.

[36] A farmers market is held on the first Saturday of each month on parkland near the intersection of Nepean Highway and Bay Road.

The Cheltenham Pioneers Cemetery is located in Charman Road, next to the railway station, and was established in October 1864.

There are also many memorials to some of Cheltenham's youngest inhabitants, such as the many unnamed babies from the nearby Children's Home (the site is now occupied by Westfield Southland Shopping centre) who died as a result of disease early in the 20th century.

[38] The suburb has been serviced by Cheltenham railway station since December 1881, which is located on the Frankston line, alongside Charman Road.

In 2020 the Victorian government completely rebuilt Cheltenham train station and removed two level crossings in the suburb.

The tunnelling for this underground rapid transit rail line is expected to start in 2026 and the first stage is due to be finished in 2035.

[43] Cheltenham is one of 82 higher order Major Activity Centres[44] identified by the Melbourne 2030 growth planning policy.