The cemetery was developed in 1890s due to Melbourne's fast-growing rate and concerns a new cemetery was required to support this growth. In 1902 a site of 116 hectares was requested including Fawkner Railway Station, and after being ratified in 1905 by parliament, it opened in 1906 as New Melbourne Cemetery and held its first burial of Dorothy Gladys Knapp on 10th December 1906. The layout was designed by architect and surveyor Charles R. Heath, his vision influenced by the garden cemetery movement, a half-spider web plan with green lawns and ornamental trees along the avenues.

Fawkner at its time was also one of three railway cemeteries, other two being Rookwood in NSW and Springvale in VIC. Mortuary trains ran daily to the station from Flinders St, helping to move the dead from the city to much distant cemeteries. It was closed around 1939, a mortuary train was restored and put on display in 1993 near the tea rooms. 

The cemetery also holds many history to Melbourne's pioneers. From 1923-24, about 220 graves from Old Melbourne Cemetery (now sits Queen Victoria Market) was moved here. This also included Melbourne's first pioneer John Batman. Fawkner built its crematorium in 1927, and later in 1971 they changed the name of the cemetery to Fawkner Memorial Park. In 1994 the Holy Angels Mausoleum opened, which allowed for above-ground burials popular in Europe for thousands of years. They served many European immigrants and Fawkner later introduced private mausoleums for families. The cemetery was later controlled by Greater Metropolitan Cemeteries Trust under Class A Trust in March 2010 along with eight other wider-metropolitan cemeteries.

Those scattered or in public graves have no available headstone or plot and no photo request can be fulfilled as a result.