Victoria has one gun for every eight citizens, with 35,000 new guns flooding into the state in the past year.
Gun control groups say the numbers are frightening but shooters say the rise is because more people are appreciating shooting as a safe and fun sport.
Victoria had 764,767 registered guns in 2014-15, up from 728,999 the previous year.
"It's a startling number and I believe it's a frightening number in terms of the increase of licensed guns in Victoria," Gun Control Australia's Roland Browne told AAP.
Mr Browne said gun makers are pushing deals and advertising online in a bid to expand the market.
"We are seeing money going into political parties from the importers of guns into Australia in an effort to further relax gun laws to improve their prospects of marketing guns," Mr Browne said.
But Victorian Shooters and Fishers MP Jeffrey Bourman said this claim did not add up.
"That's actually nonsensical, for the simple reason you can push a deal all you like - (but) you have to have a licence and you have to have a permit to buy the gun," Mr Bourman told AAP.
Mr Bourman said the increase in the number of guns and licences was driven by a growing awareness of recreational shooting.
"There are a lot of people now who are seeing through a lot of the hysteria that's presented and finding out that shooting is actually a good, fun and safe sport," he said.
While gun ownership has increased, weapons and explosive offences have more than doubled in Victoria over the past five years, from 6922 in 2010-11 to 14,404 in 2014-15.
About 2000 guns are stolen in Australia every year but Mr Bourman said the bigger issue is guns that are imported illegally and have never been registered.
"A war on guns like they're trying to get is not actually ever going to affect illegal guns; it's only going to affect the licensed shooters," he said.
"The fix for this is to spend more money looking for illegal guns and less money harassing the licensed owners."
Mr Browne said the idea that guns are only in the hands of lawful and safe shooters is not borne out.
"A large number of mass shootings across this continent and Europe and the United States are carried out by people who actually have gun licences and lawfully held guns," he said.
Inspector Gavan Dorian manages firearm licensing and enforcement for Victoria Police and says the gun number is not really the issue.
"What the important thing is is the regulatory regime that underpins that," Insp Dorian said.
Gun Control Australia wants federal and state governments to look at the increasing number of guns and make some changes.
Insp Dorian said conversations about regulating new gun technologies, such as the Adler rapid-fire shotgun, are being held around the country.
One thing Mr Browne and Mr Bourman agree on is that Australia does not want a culture of people carrying weapons for protection.
"We don't have that sort of society, we don't need that," Mr Bourman said.
VICTORIAN GUNS 2014-15
- 202,357 licences, up from 198,368 in 2013-14
- 1673 licences cancelled, up from 1443 in 2013-14
- 764,767 registered guns, up from 728,999 in 2013-14
- 817 gun registration applications rejected, up from 762.
- About 2000 guns stolen each year nationwide.
SOURCE: Victoria Police