Alvie is a rural village 12 km north-west of Colac in western Victoria. It is situated on an area of fertile land between Lakes Colac and Corangamite. A short way south of Alvie there is the Red Rock memorial lookout, so named because of the volcanically produced reddish-earth landscape known as the Warrion hills. It gives a good view of the lakes and adjoining farmlands.

Alvie was probably named after the Scottish birthplace of James Grant, Victorian parliamentarian (1855-83) and Commissioner of Crown Lands and Survey in 1864. Farm selections first became available in the Alvie area in 1869 and again in 1886. In about 1890 a school was opened, known first as Warrion West. The Alvie post office was opened in 1894.

Alvie was suited to grazing, dairying and vegetable-growing, particularly potatoes and onions. In about 1913 a creamery was replaced with the Alvie cheese and butter factory. A consistent population of over 400 people was recorded at Alvie during the censuses for 1911 to 1961. In 1955 the cheese factory was taken over by the Colac Dairying Company, and later by Bonlac in 1986. It has since closed.

A railway line from Colac to Alvie ran during 1923-54. The line's closure nearly coincided with a consolidated school being established at Alvie in 1951-52, enabling the closure of nine surrounding schools, including Cororooke and Warrion. The school had nearly 400 pupils in 1959. In 1998 there were 92, and 40 in 2010, and 33 in 2014.

Alvie has a pre-school centre, an Anglican church, a hall, a football club, a sports oval and the Red Rock winery. Its census populations have been:

Census date Population
1911 482
1961 428