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The area was first occupied for farming in the 1850s and was originally named after a property, “Clayton Vale”, owned by lawyer John Hughes Clayton in the 1860s. A township was originally gazetted on Dandenong Road and in 1862 a primary school was opened at the corner of Dandenong Road and Clayton Road, to serve the whole of the Clayton district. This school changed its name to Clayton North Primary School in 1954.
The construction of the railway to Dandenong and Gippsland about 1 km south of Dandenong Road in 1878 prompted the start of a second township where the line crossed Clayton Road.
The Post Office opened on 18 November 1887 as Clayton’s Road Railway Station and was renamed Clayton in 1891.
Clayton’s rural lands and relative proximity to Melbourne attracted two institutions at the turn of the century: the Talbot Colony for Epileptics on land later occupied by Monash University, and a Women’s Convalescent Home. Apart from that, in 1900 the community consisted of farms, three hotels, two churches, a tennis court and a few shops. Market gardens, fruit growing and a municipal abattoir were the leading industries.
The 1960s saw the rapid disappearance of market gardens as urbanisation and industry advanced. At the western edge of Clayton the Oakleigh High School had been opened in 1955 and a second primary school was opened next year at Clayton South. Clayton East Post Office opened in 1958 (and closed 1979).
Melbourne’s second metropolitan university, Monash, was opened at Clayton in 1961. Monash is now Australia’s largest university. Primary schools at Westall and Clayton West opened in 1961 and 1962, and high schools at Westall and Monash (Clayton North) in 1963 and 1965. In 1971 the Catholic bishops of Victoria and Tasmania purchased land adjacent to Monash University to house their seminary, Corpus Christi College. (The seminary was moved to Carlton in 1999, and the site now serves as a conference centre.)
Numerous factories, including Volkswagen (later became the Datsun/Nissan plant), Wilke Printing, Robert Bosch GmbH and Repco were opened after the Second World War. Clayton South and Westall are closer to the sandbelt areas, with the Spring Valley Golf Club, The Grange Reserve and Heatherton Park. Sanitary landfill sites occupy former sand quarries.
While the local community was formerly a part of the now defunct City of Oakleigh local council, in 1995 the municipality became the south-western corner for the City of Monash.