Passengers on a North Melbourne tram were threatened by three machete-wielding men in a one-hour ordeal.

About 20 people, including women and students, were on a route 57 tram on Thursday at the time and it took police an hour to contain the men following a tense stand-off.

Passengers were threatened with a machete during the hour-long ordeal on a North Melbourne tram on Thursday. Credit:Jessica Shapiro

A passenger told radio station 3AW those on the tram were "absolutely terrified" by the ordeal.

"The men were threatening to kill other passengers and were spitting on people," caller John told host Tony Jones. "Their behaviour was absolutely disgraceful."