Gin Palace is largely walk-in and opens every day from late afternoon until the small hours. The one bookable spot is the large communal table, which seats up to a dozen.
Before Melbourne became famous for its laneways, before the little unmarked doors and the hidden staircases that now define the city's nightlife, there was Gin Palace. Vernon Chalker opened it in 1997, down a set of stairs off a CBD side street, at a moment when barely a handful of gins could be found anywhere in Australia and he had to import his own stock to fill the shelves. Nearly three decades later it holds one of the largest gin selections in the Southern Hemisphere and remains the spiritual home of Melbourne's drinking culture. We rank it the third-best gin bar in the world because no single room did more to make gin a way of life for an entire city.
The room
Descend from the street and Gin Palace unfolds as a sunken warren of velvet, low light and plush lounges, a deliberately decadent space that Chalker once described as channelling a bar in 1890s Budapest. There are chaise longues to sink into, gilt-framed mirrors, deep reds and golds, and a labyrinth of nooks and alcoves that make the room feel bigger and more mysterious than its footprint suggests. The lighting is kept so low that the whole place seems to glow, and the effect is unashamedly romantic; this is a bar built for lingering, for long conversations and second and third Martinis rather than a quick round after work.
That atmosphere has been carefully protected. When the current owner, Ben Luzz, closed the bar for a refurbishment in early 2024, he stripped the changes back to the practical: a new stainless-steel bar with a freezer drawer for ice, fresh carpet, an enlarged communal table. The mood, the velvet, the sense of a hidden gilded cave, was left exactly as generations of Melburnians remember it. The result is a bar that feels both timeless and lived-in, a rare thing in a nightlife scene that reinvents itself constantly.
The gin
Gin Palace opened as a mission as much as a business, and that missionary spirit still defines the list. From the six or so gins Chalker could find in the country at the start, the collection has grown to one of the largest in the hemisphere, reported at more than three hundred and thirty labels, spanning the classic London houses, the wave of Australian craft distillers who arrived in gin's modern boom, and hard-to-find bottles from around the world. The staff know the shelves well and are happy to guide you, whether you want a juniper-forward classic, a native-botanical Australian gin, or something you have never encountered.
What is striking is how the bar treats that depth. It never feels like a collection for its own sake; the range exists to be poured and explored, and the team will build a gin and tonic to your taste in a large goblet with ripe fruit and a considered tonic, or steer you toward a neat pour worth savouring. For a gin drinker, an evening here can be a genuine education in how far the spirit has travelled since 1997, told by people who have watched that journey happen from behind this very bar.
What to drink
The signature is the Martini, and Gin Palace takes it seriously enough to give it an entire page of the menu. The house pour is a generous ninety millilitres, cold and precise, and it is the drink to order first: a benchmark Martini in the room that arguably taught Melbourne to love the cocktail. Have it however you like it, but have it, because it is the truest expression of what this bar is about.
The other essential order is not a drink at all. The Gin Palace toasted chicken sandwich is a bar-food legend, a simple, perfect thing served until close that has developed its own devoted following over the decades. A ninety-millilitre Martini and a toasted chicken sandwich, somewhere in a velvet nook past midnight, is one of the definitive Melbourne experiences. Beyond that, the gin and tonics are excellent, and the bar keeps enough range that you could return a dozen times and never drink the same gin twice.
Why we rank it No. 3
Gin Palace earns its place on influence as much as on selection. It was a pioneer twice over: of the laneway bar model that made Melbourne one of the world's great drinking cities, and of gin appreciation in a country that, at the time, barely stocked the stuff. That it has survived and thrived for nearly thirty years, through changes of ownership and fashion, without losing its character, is its own kind of achievement. Time Out recognised as much when it handed the bar a Legend Award in 2016, honouring nearly two decades of gin-fuelled nights.
More than the accolades, though, it is the feeling of the place that puts it this high. Some bars on this list dazzle with scale or spectacle; Gin Palace wins you over with atmosphere, warmth and a sense of history you can sink into. It is the bar that proves a great gin room does not need a fifteen-metre tower or a five-star hotel behind it, only a deep collection, a perfect Martini and a room you never want to leave.
The laneway pioneer
To understand Gin Palace, you have to understand what Melbourne was like before it. In the mid-1990s the city's now-famous laneways were mostly service alleys, and the idea of a hidden basement bar down one of them was close to radical. Chalker's decision to open Gin Palace in 1997, in a sunken space off Russell Place, helped prove that these forgotten corners could hold some of the most characterful bars in the country. The laneway scene that followed, and that visitors now cross the world to experience, owes a real debt to that early leap. Gin Palace was not just early; it was a template, and the small-door, big-personality model it helped pioneer became one of Melbourne's defining contributions to global bar culture.
Vernon Chalker's legacy
Chalker, who died in 2020, was one of the quiet architects of modern Melbourne drinking. He opened Gin Palace when barely a handful of gins could be bought in Australia, importing his own stock to fill the shelves, and in doing so he backed the spirit years before its global boom. That foresight is written into the bar's character. What began as one man's conviction that gin deserved a proper home became an institution that outlived its founder and helped seed a whole national appreciation for the category. When ownership passed to Ben Luzz after Chalker's death, the care taken to preserve the room, right down to keeping the velvet and the low light through the 2024 refit, was a mark of respect for what Chalker built. To drink here is, in a small way, to see how far an idea can travel when someone commits to it completely.
Melbourne's Martini city
Melbourne takes its cocktails as seriously as any city in the world, and Gin Palace sits close to the heart of that culture. The bar's devotion to the Martini, given its own page and poured at a generous ninety millilitres, has helped make the drink a Melbourne signature, and an evening here is as good an education in the classic as you will find anywhere. The room rewards the ritual: order the Martini, let it arrive properly cold, and give it the attention it deserves. For visitors building a Melbourne bar crawl, Gin Palace is the essential anchor, the place that ties the city's laneway history and its Martini obsession together in one velvet basement. With one of the largest gin selections in the Southern Hemisphere behind the bar, it can back that reputation up bottle for bottle.
How to spend an evening
The best Gin Palace nights are unhurried. Arrive in the evening, claim a lounge or a nook, and start with the ninety-millilitre Martini as a benchmark. From there, ask the staff to guide you through the gin list, whether toward a native-botanical Australian bottle, a classic London Dry, or something you have never heard of, built into a goblet gin and tonic with ripe fruit and a well-matched tonic. Order the toasted chicken sandwich at some point, because everyone should try it once, and settle in. The room is designed for lingering, and it is at its best late, when the light is low and the city outside has gone quiet.
How to visit
Gin Palace is at 10 Russell Place, tucked into the laneways of Melbourne's CBD, and it opens every day from late afternoon through to the small hours, making it as good for a nightcap as for the start of an evening. It is largely a walk-in bar; the only space you can reserve is the large communal table, which seats up to a dozen and is worth booking for a group. Prices are mid-range for a bar of this quality, and the room rewards an unhurried visit, so settle into a lounge, order the Martini, and let the night unspool. For anyone drinking their way through Melbourne, or through gin, this is the essential first stop and, for many, the one they keep coming back to.
The velvet and the ritual
Part of what has kept Gin Palace beloved for so long is that it understands atmosphere as a craft in its own right. The deep lounges, the drapes, the gold-framed mirrors and the pools of low light are not set dressing but the whole point, an invitation to slow down and stay. Regulars have their favourite corners, and the layout, a series of connected nooks rather than one open room, means a busy night still feels intimate. It is the kind of bar where an hour becomes three without anyone noticing, where the Martini list and the low murmur of conversation conspire to make the outside world recede. In an age of bright, loud, high-turnover venues, that commitment to comfort and mood feels almost radical, and it is a large part of why the room has aged so gracefully.
Where it sits in Melbourne
Melbourne is routinely named among the best bar cities in the world, and Gin Palace is one of the addresses that earned it that reputation. It sits within easy walking distance of a dense cluster of the city's celebrated laneway and rooftop bars, which makes it a natural anchor for a night in the CBD. What distinguishes it from its neighbours is longevity and focus: while the scene around it has churned through trends, Gin Palace has stayed true to gin and to its own particular mood for nearly thirty years. For a visitor trying to understand how Melbourne drinks, and why the city takes such pride in its bars, there is no better or more atmospheric place to begin than a booth here with a Martini in hand.
The verdict
Gin Palace is proof that a great gin bar is as much about feeling as about inventory. The list is deep and the Martini is superb, but what you remember is the room: the velvet, the low light, the sense of having slipped into a warmer, more glamorous version of the city. It helped invent Melbourne's laneway culture, championed gin before the country cared, and has kept its soul intact across a change of era. For all those reasons it is not just one of the best gin bars in the Southern Hemisphere but one of the most quietly influential bars anywhere, and an essential stop for any drinker who finds themselves in Melbourne after dark.
A word on the crowd
For all its history, Gin Palace has never become a museum piece or a tourist trap. It draws a genuine mix, industry regulars, couples on a date, gin obsessives and curious first-timers, and the service treats them all with the same easy warmth. That living, unpretentious quality is what keeps the room feeling current after nearly three decades, and it is the final reason we rank it so highly.