Sarah MacDiarmid was born on 15 November 1966 and emigrated with her family from the Scottish Highlands to Australia in 1987. On 11 July 1990, then aged 23, she played tennis after work with two friends at what was then known as Flinders Park in Batman Avenue, East Melbourne. The group walked to Richmond station, narrowly missing a Frankston line train, and instead caught a train to Caulfield before changing to a Frankston service. Her friends disembarked at Bonbeach, while MacDiarmid continued on to Kananook station, where her car was parked. She was last seen getting off the train and walking toward the poorly lit station car park at approximately 10:20 p.m.
By around 11 p.m., her family became concerned that she had not arrived home. At 1 a.m., her brother Alisdair went to Kananook station to wait for the last train, arriving at 1:15 a.m., but Sarah was not aboard. He located her locked car in the car park, with the doors and boot secured.
Police investigating the disappearance found bloodstains beside MacDiarmid's red 1978 Honda Civic and drag marks leading into nearby bushes, leading them to suspect she had been assaulted. A cigarette lighter belonging to her was found on the ground, but no other trace of her was recovered. Witnesses later reported seeing her cross the footbridge to the car park after leaving the train, and some heard a woman shouting, "Give me back my keys!" A large-scale search lasting 21 days, involving air, sea and land resources and more than 250 police personnel, did not produce results.
In May 2006, a coroner's inquest led by Ian West found that MacDiarmid "had met her death as a result of foul play but the exact circumstances were unknown." Rewards for information have grown over time: an initial state government reward of $50,000 was increased with an additional $75,000 from an anonymous benefactor, and the total reward reached $1 million in 2004, which remains current.
In 2011, convicted serial killer Paul Denyer was interviewed by police regarding the case and denied any involvement, telling Detective Ron Iddles he was "sick of being accused of murder." In May 2014, News Corp Australia reported that investigators considered convicted serial killer Bandali Debs a suspect, though Victoria Police declined to comment, describing the case as "active."
The case has drawn public attention over the years, including a 2004 feature on the television series Sensing Murder, a 20th-anniversary memorial event in 2010 attended by family and friends, and a 2021 nine-part podcast, Searching for Sarah MacDiarmid, hosted by author Vikki Petraitis.