Many bars and restaurants have finally discovered ancient indigenous ingredients, but few are taking the history and ownership of these as seriously as Yarra Falls, a new bar in Melbourne's CBD with big aims that belie its size.

The 25-seater is located in the 1866 Tavistock House, which has been home to several inns and hotels in its life. Yarra Falls co-owner Brendan Keown (ex Baxter Inn, Hotel Esplanade) says it's fitting to continue that tradition, although the Irishman is more interested in questioning the past than romanticising it.

Showcasing native botanicals is his way of highlighting the history of this particular part of Melbourne, but he's doing so carefully, consulting with local land councils and sourcing from businesses owned by or working with Indigenous people. It's an ongoing process.

"Given the history in this country and around these kinds of issues, it was almost the first thing I thought about," Keown says, adding that he gets lots of questions on this, too.

The bar is also committed to mixing seasonal drinks using Victorian produce, even if it means only having a Daiquiri on the menu for a few months of the year. Right now you might find the Bush Doof: Irish whisky that's smoked over paperbark and stirred down with Westside Ale Works' red IPA. A late-summer amaro features foraged wattleseed and lemon myrtle.

Products by Applewood, Fin Wines and Westside have been selected for their values as much as their quality.

It's not all serious though. "No one goes to a bar to get a lecture," Keown says.

The fun starts as soon as you go to order a drink and see the man-made waterfall that functions as a backbar, something Keown always wanted in his own bar. "We kind of had to MacGyver the whole thing," he explains, but it helps bring the natural world inside, as do overhead lights arranged in the shape of a constellation. "It feels like you're camping outside."

The waterfall also references the natural waterfall that divided the Yarra where Queen's Bridge now stands. The falls were blown up in 1883, despite being a meeting place for the various members of the Kulin nation. It's a powerful reminder of Melbourne's – Naarm's – long history.

Bar snacks lean Irish, with griddled potato bread and a daily pot of soup, but there are plans for oysters soon and eel when eel season begins.

Open Wed-Sat, 5pm-1am

381 Flinders Lane, Melbourne, no phone, Instagram @yarrafalls