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(See also: List of Melbourne railway stations).
Tunneling works commenced in the early 1970s, and the system was ready for service in 1982. Queen Elizabeth II toured what was then Museum Station as part of the ceremonies.
The Loop is made up of four single-track tunnels, and is fed into by the city's 15 surface suburban rail lines. Depending on the day of the week and the time of day, trains will run in different directions in different tunnels. All trains, however, end up at Flinders Street Station, having either travelled through the underground section first, or travelling direct to the Flinders Street and then using the Loop to turn around and return down the line they came from. There is also a special City Loop train which travels continuously around the Loop to provide cross-CBD service.

The direction of travel changes according to the table below. Each suburban line belongs to a group, and each group's trains all run in the same tunnel.
| Direction of travel | ||||
|---|---|---|---|---|
| Period | Burnley group | Caufield group | Clifton Hill group | Northern group |
| Weekday mornings | All trains run through Loop first | |||
| Anti-clockwise | Anti-clockwise | Anti-clockwise | Clockwise | |
| Weekday afternoons | All trains run to Flinders Street then through Loop | |||
| Clockwise | Clockwise | Clockwise | Anti-clockwise | |
| Weekends | All trains except Caufield group run to Flinders Street first | |||
| Clockwise | Anti-clockwise | Clockwise | Anti-clockwise | |
The Burnley group contains the eastern Glen Waverly, Lilydale, Belgrave, and Alamein lines. The Caufield group contains the southeastern Sandringham, Frankston, Pakenham, and Cranbourne lines. The Clifton Hill group contains the northeastern Epping and Hurstbridge lines. The Northern group contains the northern Broadmeadows and Upfield lines, and the western Werribee, Williamstown, and Sydneyham lines, as well as the special events only Flemington line.