A large group of teenagers has been involved in an ugly battle with several occupants of a Fitzroy home in one of Melbourne's busiest streets.

The melee is now the subject of a police investigation.

A group of around 40 youths were involved in an attack on a Fitzroy house. Credit:Georgia Matts

The gang of up to 40 youths, believed to live in the Carlton housing commission flats, armed themselves with sticks, branches and rocks, while occupants of Nicholson Street residence are understood to have wielded a hatchet and a baseball bat.

Several patrons at the nearby Pumphouse Hotel and backpackers at the Nunnery youth hostel witnessed the wild altercation about 5.30pm on Saturday.