A group of anti-carbon tax protesters gathered near Government House, where the Queen has stopped for an official lunch.
Armed with banners reading "Welcome, your Majesty, please dissolve parliament" and "carbon tax corruption", they appeared to number about 50 among a growing crowd of spectators.
Earlier, hundreds of well-wishers welcomed the Queen to Melbourne, lining the streets outside the new Royal Children's Hospital where she was presented with flowers by formerly conjoined twins Trishna and Krishna.
The hospital was the Queen's first stop on her four-hour visit to Melbourne, and she waved and smiled as she and the Duke of Edinburgh were greeted by flag-waving patients and staff.
Long-stay patient Brooke Dance, 14, opened the car door for Her Majesty, who stepped out in a fuchsia coat and matching hat, before being greeted by Premier Ted Baillieu.
She was met at the hospital by the head of its emergency department, Dr Simon Young, who gave her details of the billion-dollar hospital, which will take its first patients next month.
After a brief tour of the hospital she unveiled a plaque and meet Trishna and Krishna, the Bangladeshi sisters who were separated in 2009 at the current Royal Children's Hospital, which the Queen opened 48 years ago.
Dame Elisabeth Murdoch, who attended that opening on February 25, 1963, was among the crowd seated within the hospital for Her Majesty's arrival.
After opening the hospital, the royal couple then visited Federation Square and mingled with the crowds, thousands of whom began arriving in the city centre on a sunny Wednesday morning.
The royal couple then took a tram ride up St Kilda Road to the state reception at Government House.
While police were on alert for any trouble, Occupy Melbourne anti-capitalist protesters promised not to disrupt the royal visit.