Yarra Theological Union (YTU) was originally founded in 1971 by the Carmelites, the Franciscans, the Missionaries of the Sacred Heart and the Passionists. Over the years other orders joined: the Redemptorists (Australian and New Zealand Provinces), Pallottines, Dominicans, Divine Word Missionaries, the Discalced Carmelites and the Blessed Sacrament Congregation. Graced by the generosity of the Franciscan Friars YTU is located at St. Paschal Friary.
On 18th January 1973, YTU was granted formal recognition as an institute of priestly formation by the then Archbishop of Melbourne, James Cardinal Knox. In September 1973, YTU, together with the Catholic Theological College in Clayton and the United Faculty of Theology in Parkville, was approved by University of Divinity (then MCD) as a College with the right to teach for the degree of Bachelor of Theology. This was extended to approving the right to teach towards the postgraduate degrees of Master of Theology and Doctor of Theology in 1975.
Over recent years YTU, together with the other college members of University of Divinity (UD), has extended its teaching program to provide postgraduate units for candidates for the degrees of Master of Theological Studies and, from 2000, Graduate Diploma in Theology, Master of Arts and Doctor of Philosophy.