About 150 children turned out for the Geelong audition of the film, Chickabees.
The film is based on the much-loved Margaret Clark children’s book of the same name.
Clark lives in Geelong.
Mercurio, who is also a judge on Dancing With the Stars, led the children through dance steps.
Mercurio will star in the film as well as choreograph the dancing.
To be filmed in Geelong, Chickabees tells the story of a group of 12-year-old dancers trying to be famous.
Mercurio said Geelong’s best young dancers, singers and actors were asked to learn and perform dance sequences as well as perform a song of their choice.
Chickabees is scheduled for release in Australian cinemas in Easter 2015.