A "pervert" Anglican priest who boasted online about his child sex abuse fantasies could avoid jail if a judge decides the man's community work outweighs his virtual crime.

Former Sunshine vicar Philip John Murphy, 53, on Monday pleaded guilty to transmitting child pornography using a carriage service over numerous sexually explicit online conversations he had with men in 2016 and 2017.

Under the username "Pervert", Murphy spent several months chatting to online pedophiles about child sex abuse fantasies involving young boys before police seized his computer in February 2017.

Murphy told one man that he wanted to sexually abuse hundreds of children as young as two years old, prosecutor Jessica Mackay told the Victorian County Court.

Murphy discussed abusing children on Skype and other online messaging services between December 2016 and February 2017.

"He would tell them he was a priest," Ms Mackay said.

"He would send them photos of himself wearing his clerical collar to gain their trust."

While chatting to one man who said he had young sons, Murphy asked the boys' ages before telling the father "I'm in a very pedo mood".

The priest also said he wished he could join a man in abusing a six-year-old boy with a handicap, and said he would be willing to travel if "there is really young on offer".

Murphy was questioned about his online activities after he returned to Australia from a trip to Hong Kong in February 2017.

Police later searched his home and the Holy Apostles' Anglican Church, in Sunshine West, on August 3, 2017 and charged him with multiple child pornography offences.

During his police interview, Murphy said he had been going through a personal crisis linked to workplace bullying when he engaged in the online conversations.

"He said he had been drawn to the behaviour because of his depression," Ms Mackay said.

Murphy's barrister Geoffrey Steward said the priest was ashamed of his conduct and had shown overwhelming remorse.

The defence has asked judge Phillip Coish not to jail Murphy and to consider his previously unblemished record working with the homeless and helping the community.

"His voluntary contributions to the community have been extraordinary," Mr Steward said.

"He has been a man who did not merely preach from the pulpit. He has been a man who went out into the community."

Mr Steward also said Murphy's crime was on the lower end of the scale because "they were words, not deeds".

But the prosecution says Murphy deserves an immediate jail sentence.

Ms Mackay said the priest's own admission to police about looking at child pornography three years before he came to their attention should "temper" any findings the judge makes about Murphy's prior good character.

Murphy, who is on bail, is due back in court for sentencing on Friday.