In land use, design and development terms the modern university in Australia is a fixture in all urban environments including central business districts, inner city, middle ring, outer suburbs, and regional towns. The predominant spatial pattern in the university expansion era of the late 1950s through the 1970s saw universities develop expansive campuses on large ‘greenfield’ sites. The notion of the ‘city campus’ has stood in stark contrast, despite some of Australia’s earliest educational institutions originating in buildings located within the city’s core. The metamorphosis of Australian CBDs in recent decades has resulted in city campuses today being presented with a unique set of opportunities and constraints that were less relevant in their formative years. This is also a global phenomenon in education, urban design and policy terms being played-out in the Australian context. RMIT University in Melbourne’s CBD exemplifies the rise and indeed renaissance of the centrally located city campus. Drawing in part from interviews with practitioners and administrators as well as broader analyses of available data and literature, this paper identifies and discusses issues and challenges pertaining to the city campus phenomenon through the lens of RMIT. The discussion raises broader issues about the teaching and learning context in which universities operate, their spatial expression, adaptive reuse, perceptions of iconic built form, heritage, creative architectural and urban design in managing the CBD interface, and ultimately, the robustness of a knowledge-based approach in city renewal.