The Hochgurtel Fountain outside the Royal Exhibition Building in Carlton Gardens was defaced with graffiti and the water was turned bright red, police said.
Red paint was also splashed onto figurines in the middle of the fountain.
Police allege unknown offenders targeted the fountain on Nicholson Street sometime between 6pm on Friday and 6am today.
City of Melbourne officials were alerted to the vandalism.
A council team has since cleaned the graffiti and drained the red water.
Police are hoping to speak to any witnesses or anyone who was in the area between Friday and today.
Anyone with information is urged to contact Crime Stoppers on 1800 333 000.
The Hochgurtel Fountain, built in 1880, stands 10-metres tall and was constructed ahead of Melbourne’s first international world fair.
It underwent a major restoration in 1994.
The Royal Exhibition Building and the surrounding Carlton Gardens was granted listing as a World Heritage Site in 2004.
