It is named after Dame Nellie Melba, a famed Australian opera singer of the early 20th century, whose former country estate lies at the southern end of the highway in Coldstream.

Melba Highway commences at the intersection of High Street (Goulburn Valley Highway) and Station Street in Yea and heads south as a dual-lane, single-carriageway road, passing through forest and open agricultural land and mostly following the course of Yea River until it reaches Glenburn, where the highway descends down a steep grade to Dixons Creek at the bottom of the Great Dividing Range, through a road junction that links the highway with the nearby towns of Kinglake and Toolangi, a former home of Australian author C. J. Dennis.

It continues south and then west along the bypass around Yarra Glen, then continues south, passing through the alluvial plains of the Yarra River and the rich Yarra Valley vineyards, before eventually passing the Melba Estate just before terminating at the intersection with Maroondah Highway in Coldstream.

The passing of the Road Management Act 2004[12] granted the responsibility of overall management and development of Victoria's major arterial roads to VicRoads: in 2004, VicRoads re-declared Melba Highway (Arterial #6300) between Yea and Coldstream.

[5] The Yarra Glen bypass which opened in May 2010 diverts trucks and other through vehicles.