Victoria Police thought they had the DNA profile of Maria James' killer, but an embarrassing bungle saw a bloodied pillowcase from an unrelated crime put in the wrong exhibits bag.
That resulted in DNA evidence being used to wrongly rule out suspects in Ms James' 1980 murder, in which she was stabbed 68 times.
Victoria Police admitted on Thursday it had bungled its investigation thanks to a storage mix-up, introducing it to the James file possibly three decades ago.
Police sat on the error for three months before notifying Ms James' family, her son Mark James saying there were some "suspicious elements to this case".
"I am actually angry. I feel quite indignant," he told the ABC on Thursday.
Police say it was purely down to "human error".
"Basically, this means we need to go back and re-examine all the exhibits from the Maria James investigation," Assistant Commissioner Steve Fontana told reporters on Thursday.
That pillowcase was first tested 14 years ago, Mr Fontana said.
It was eventually used to dismiss Catholic priest Anthony Bongiorno, who has since died, as the killer.
All previously ruled out suspects will now be re-examined, but Mr Fontana would not say how many there are.
"We've got to go back and...see whether we can actually identify whether the offender has left any trace evidence behind," Mr Fontana said.
Ms James' sons Mark and Adam were 13 and 11, respectively, when she died and have long thought Bongiorno was a suspect because he had abused Adam as a child.
Adam James recently detailed his abuse to an ABC podcast looking into the case.
The podcast also looked into the possibility another dead pedophile priest from the same church, Thomas O'Keefe, was involved after Adam revealed he also abused him as a child.
Mark James says he's angry over the latest turn in the investigation.
Victorian Coroner's Court confirmed it is considering an application to set aside the findings of an earlier, inconclusive inquest.