In 1847, having been advised to go to a warmer climate, he sailed for Australia with two sisters from Bremen. It is said that, still on the ship, he already fished the first plants out of the water to analyse them.
He arrived at Adelaide on 18 December 1847 and found employment as a chemist. Shortly afterwards, he obtained 20 acres of land not far from Adelaide, but after living on it for a few months returned to his former employment. He travelled through the colony from 1848 to 1852, discovering and describing a large number of plants previously unknown to Western science. He contributed a few papers on botanical subjects to German periodicals, and in 1852 sent a paper to the Linnean Society at London on "The Flora of South Australia". He moved to Melbourne, capital of the new colony of Victoria in 1851.
He was appointed Government Botanist for Victoria by Governor Charles La Trobe in 1853 (a post that was newly created for him), and examined its flora, and especially the Alpine vegetation of Australia, which was previously unknown. He explored the Buffalo Ranges, then went to the upper reaches of the Goulburn River and across Gippsland to the coast. The neighbourhoods of Port Albert and Wilson's Promontory were explored, and the journey of some 1500 miles was completed along the coast to Melbourne
In the same year, he established the National Herbarium of Victoria, which can still be visited today. It has many plants from Australia and abroad, many of which were collected by Mueller. Also, his large private library in Melbourne can still be visited.
Then, as phytographic naturalist, he joined the expedition sent out under Augustus Gregory by the Duke of Newcastle, Secretary of State for the Colonies. He explored the Victoria River and other portions of North Australia, was one of the four who reached Termination Lake in 1856, and accompanied Gregory's expedition overland to Moreton Bay. Mueller, for his part, found nearly 800 species new to Australia. He published in this year his Definitions of Rare or Hitherto Undescribed Australian Plants.
From 1854 to 1872, Mueller was a member of the Victorian Institute for the Advancement of Science, which later became the Philosophical Institute of Victoria. He was President of the Philosophical Institute in 1859 when it received a Royal Charter and became the Royal Society of Victoria. He was an active member of the Society's "Exploration Committee" which established the Burke and Wills expedition of 1860. Mueller promoted the exploration of Australia, and as the only member of the Exploration Committee with any experience of exploration, he made several speeches to the Society on the topic. He was influential in the establishment, provisioning and composition of the exploration party but did not favour the selection of Burke as leader.
From 1857 to 1873, he was director of the Royal Botanic Gardens, Melbourne, and not only introduced many plants into Victoria, but made the excellent qualities of the blue gum (Eucalyptus globulus) known all over the world, and succeeded in introducing it into the south of Europe, North and South Africa, California, and the extratropical portions of South America.
For these services, Mueller was decorated by many foreign countries, including Germany, France, Spain, Denmark and Portugal. He was appointed Fellow of the Royal Society in 1861, and knighted as KCMG in 1879.
He was the benefactor of explorer Ernest Giles, the discoverer of Lake Amadeus and Kata Tjuta. Giles had originally wanted to name these Lakes Ferdinand and Mt Mueller, but Mueller prevailed upon Giles to name them Lake Amadeus, after King Amadeus of Spain, and Mt Olga, after Queen Olga of Württemberg, both of whom had granted him honours. In 1871, to celebrate their 25th wedding anniversary, King Karl of Württemberg and Queen Olga gave him the hereditary title of Freiherr. He was then known as Baron Sir Ferdinand von Mueller.
By 1873, influential Melburnians were critical of Mueller's scientific and educational approach with the Royal Botanic Gardens. In April 1873, Mueller created the genus Guilfoylia and described William Guilfoyle as "distinguished as a collector [who] evidenced great ardour" and held high hopes for his collecting ability. Mueller's opinion changed when Guilfoyle was appointed to take his place as Director of the Botanic Gardens in July 1873. He accused Guilfoyle of being a "nurseryman [with] no claims to scientific knowledge whatever" and of getting the job due to being related to the wife of the responsible Minister. Mueller subsequently abolished Guilfoylia as part of the genus of Cadellia in his botanical census of 1882. Guilfoyle went on to landscape the gardens in an aesthetic and pleasing style welcomed by most Melburnians.
He published eleven volumes of Fragmenta phytographica Australiae (1862-1881), two volumes of the Plants of Victoria (1860-1865), and other books on the Eucalyptus, Myoporaceae, Acacia, and Salsolaceae, all profusely illustrated. He also co-operated in the production of George Bentham's Flora Australiensis. He took a leading part in promoting Australian exploration, especially the Burke and Wills expedition, which was the first to cross the continent, and in the various attempts to unravel the mystery which attended the fate of his fellow countryman Ludwig Leichhardt (1813-1848).
Mueller died in Melbourne and is buried in the St. Kilda Cemetery. His grave is against the southern wall.