The whirlwind, which Australians refer to as a "willy willy", made a surprise appearance at the Earthcore festival in Pyalong, north of Melbourne.
Olivier Bonenfant, who shot the footage, told the BBC that partygoers immediately started running towards the column of dust and debris.
He uploaded the footage to YouTube, dubbing the incident a "doofnado".
"Doof" is an Australian term for a dance party held in the bush.
"It looked pretty fun … if I wasn't filming I would have run into the Doofnado too," the 32-year-old Canadian said.
Revellers at an Australian dance music festival were filmed charging into a powerful dust whirlwind on Saturday.