The business centre of the Upper Yarra, Yarra Junction is a growing business and commercial centre. The town is situated on the Warburton Highway, between Warburton and Lilydale, making it a popular holiday destination for holidaymakers and overseas visitors or travellers passing through on their way to Warburton, Marysville and Healesville. It is located just east of where Little Yarra River joins the Yarra River.
Yarra Junction's name highlights the fact that it was a rail junction where the 36-inch gauge of the Powelltown timber tramway met the standard gauge of the Victorian Railway. The former railway line is now a pleasant walking track. The Upper Yarra historical museum is located in the old railway station.

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