Melbourne (pronounced /ˈmel.bən/) is the second most populous city in Australia, with a metropolitan area population of approximately 3.74 million (2006 estimate). Located around Port Phillip Bay in the country's south-east, Melbourne is the state capital of Victoria.
Melbourne is a major centre of commerce, industry and cultural activity. The city is often referred to as Australia's "sporting and cultural capital" and it is home to many of the nation's most significant cultural and sporting events and institutions. Melbourne is notable for its mix of Victorian and contemporary architecture, its extensive tram network and Victorian parks and gardens, and its diverse, multicultural society. It was the host city of the 1956 Summer Olympics and the 2006 Commonwealth Games.
Melbourne was founded by free settlers in 1835, 47 years after the first European settlement of Australia, as a small pastoral settlement situated around the Yarra River. Transformed rapidly into a major metropolis by the Victorian gold rush in the 1850s, "Marvellous Melbourne" became Australia's largest and most important city by 1865, but was overtaken by Sydney as the largest city in Australia during the early 20th century.
Melbourne served as the capital city of Australia from the time of the new nation's Federation in 1901, until Federal Parliament moved to the new, purpose-built capital, Canberra, in 1927.