The tramway network is centred around the Melbourne central business district (CBD) and consists of approximately 1,700 tram stops across 24 routes.

Melbourne's cable tram system opened in 1885, and expanded to one of the largest in the world, with 75 kilometres (46.6 miles) of double track.

[11] The MTOC's three lines fed their cable tram system: Victoria Bridge cable tram terminus to Kew (Boroondara Cemetery), opened in 1887 and closed in 1915 after its sale to Kew Council for conversion to a Prahran & Malvern Tramways Trust electric line; Hawthorn Bridge cable tram terminus to Auburn Road, via Burwood Road, Power Street and Riversdale Road, opened in 1890 and closed on 31 January 1916 after being sold to the Hawthorn Tramways Trust for conversion to electric traction; and the Zoo line, from the Royal Parade cable line to Melbourne Zoological Gardens, opened on 10 March 1890 and closed in November 1923.

[15] When the lease expired on 1 July 1916, all the assets of the MTT and MTOC cable network were taken over by the Melbourne Tramways Board (MTB).

[16][18] The first electric tram in Melbourne was built in 1889 by the Box Hill and Doncaster Tramway Company Limited—an enterprise formed by a group of land developers—and ran from Box Hill railway station along what is now Station Street and Tram Road to Doncaster, using equipment left over from the Centennial International Exhibition of 1888 at the Royal Exhibition Building.

[21][22] VR opened a second, standard gauge, electric tramway from Sandringham railway station to Black Rock on 10 March 1919, it was extended to Beaumaris on 2 September 1926.

[26][27] The Victorian Government of Sir Thomas Bent approved an application by Mr Morgan to build a tramway system in the Essendon area on 29 March 1904, with a poll of ratepayers overwhelming supporting the proposition on 29 July 1904 (2874 votes to 146).

He returned next year, confirmed in his long-held opinions that electric trams were superior to buses and that overhead wires were preferable to the underground conduit (cable) system.

In January 1990, the Labor government of Premier John Cain tried to introduce economies into the running of the public transport system, including the removal of tram conductors.

[46] In the 1992 state election, the Liberals came to power under Premier Jeff Kennett, who planned to cut the costs of Melbourne's public transport network and remove conductors.

[48] VicTrack, a new statutory authority within the Victorian Government, was created in 1997 to hold the ownership of land and assets relating to Victoria's tram and rail systems.

[49] In addition, a statutory office was established—the Director of Public Transport—to procure rail and tram services and to enter into and manage contracts with transport operators.

[16][51] Following a transitional period, the right to operate the two tram businesses was officially transferred from the government to the private sector under franchise agreements on 29 August 1999.

[16] After several years of failing to make a profit, more than a year of negotiations over revised financing arrangements with the government, and grave concern over its future viability, National Express Group announced on 16 December 2002, its decision to walk away from all of their Victorian contracts and hand control back to the state government, with funding for its operations to stop on 23 December 2002.

[54] As a part of the privatisation process, franchise contracts between the state government and both private operators included obligations to extend and modernise the Melbourne tram network.

[56][57][58] In 2003 the marketing and umbrella brand Metlink was introduced to co-ordinate the promotion of Melbourne's public transport and the communications from the separate privatised companies.

[85] In 2019 the government also allocated $4.5 million to plan for two new tram lines to the Fisherman's Bend urban renewal precinct, although it stopped short of committing to the project.

[86] In 2020, six tram stops were rebuilt to be low-floor and accessible on Nicholson Street in Carlton as part of the Route 96 Project started in 2012 to make the entire line level-access and more separated from car traffic.

They have two equal-wheeled bogies, with all four axles powered by a separate motor; carbodies feature a distinctive "drop centre" section, allowing the passenger steps at the central doorways to be closer to the ground.

[32][101][102] It was not until the 1980s that the W-class started to be replaced in large numbers, and by 1990 their status as an icon for the city was recognised, leading to a listing by the National Trust of Australia.

[104] In January 2010, it was announced by the new transport minister that the 26 W-class trams running the two inner city routes, would be phased out by 2012, prompting a new campaign from the National Trust of Australia.

[105][106] In 2010, it was proposed to better utilise the unused W-class trams by refurbishing and leasing them as "roving ambassadors" to other cities, generating revenue which could then be invested back into the public transport system.

[108][109] The development of new rolling stock to replace the W-class began in the early 1970s, employing a modern design, based on the M28 trams running in Gothenburg, Sweden.

They were similar – the major differences being the brakes, door operating mechanisms, and that the A1-class were built with trolley poles, while A2-class were the first trams for Melbourne that were equipped with pantographs only.

Alstom and a joint venture comprising UGL Rail and CAF were shortlisted to design and build these new trams,[92] with the first of the new models entering service in 2025.

The most common disturbances to the supply system are over height vehicles, falling tree limbs, damaged poles, and fires nearby to overhead wires.

[170][171] The character of Nora in the novel Monkey Grip (1977) by Helen Garner occasionally uses trams to run errands and make daily trips around the city.

[177] In 2006 a W-class tram 965 was gifted from the City of Melbourne to Australian Mary Donaldson and her fiancé, Danish Crown Prince Frederik, on the occasion of their marriage.

Over the lifetime of the project many notable local artists participated, including Mirka Mora, Michael Leunig, Howard Arkley and Reg Mombassa.

In 2018 the program was extended for a further 3 years through to 2021, and featured the first interactive art tram (using augmented reality) designed by Dr Troy Innocent for Melbourne International Games Week.