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"In terms of the way you approach it, they are not very different," says Jacqueline Durran, who won this year's costume Oscar for her work on Joe Wright's Anna Karenina. "It is still about what is the best costume for the character and working out what the director wants." In the end, costume is there to tell a story.

Hollywood Costume, which opens at ACMI on April 24, is the brainchild of Deborah Nadoolman Landis, costume designer of films including Raiders of the Lost Ark, academic and a woman of such forceful enthusiasm that she could probably have persuaded Marlene Dietrich to wear a paper bag if she thought a role demanded it. In her view, costume has for too long been sidelined in the public eye as a relatively trivial branch of production design. Not that this is the public's fault. It is an attitude that goes right to the heart of an industry that still regards costume as "women's work" – even when it isn't – and pays for it accordingly.

To a degree, being ignored is part of the job. A costume designer has triumphed – most of the time, anyway – if we see the characters in a film as people we recognise and can understand without thinking about the fact that somebody dressed them. Ideally, we should notice costumes only when they are spectacular, lavish and glamorous – the Ascot scene in My Fair Lady comes to mind – or definitively stylish. No designer worth his or her salt wants to be told that a film was bad but their frocks looked fantastic; the point is to help make the film good.

As a result, however, the process is largely hidden, going unremarked upon even by the many people who think of themselves as film fans.

Hollywood Costume sets out to lift the curtain, however slightly, on the workings of this back-room art. Having assembled dozens of costumes dating back as far as 1920, Nadoolman Landis juxtaposes pieces from recognised "costume films", such as Gone with the Wind, with designs for films where we might have assumed – quite wrongly – that the characters were not wearing costumes at all. Fight Club's thrift-store copies are a good example; so are Matt Damon's anonymous threads in The Bourne Identity.

Of course, all these clothes look the way they do for good reasons. Little explanatory notes give us glimpses of them – of the character conceptions, the discussions with directors about the overall visions they were pursuing and the making of "mood boards", followed by the shopping, the sewing and ageing of costumes, the rummaging in designers' treasure chests of braids and buttons, the often-exhaustive conferences with actors. Costume is not about movie glamour, unless that glamour is a calculated effect; it certainly has nothing to do with fashion, even if a film such as Bonnie and Clyde very occasionally sparks a trend. "Fashion is a commodity and a fashion designer designs clothes to sell them," Nadoolman Landis says firmly. "That is not our job. Very often the actors look very bad – especially in roles they win Oscars for! – and that is our job, too."

Even so, it would be perfectly possible to read the Hollywood Costume exhibition as a silver-screen spectacle. Here is Uma Thurman's famous yellow tracksuit from Kill Bill; there is Audrey Hepburn in Holly Golightly's black sheath, designed by Hubert de Givenchy, from Breakfast at Tiffany's; one can gasp at the jewelled wonder that is Elizabeth Taylor's adornment as Cleopatra or at a whole gem-encrusted section called Royal Romance. There are also costumes, right there before your eyes, that could legitimately be described as iconic: everyone will recognise, for example, the white, knife-pleated frock that fluttered around Marilyn Monroe's legs as she stood over the subway vent in The Seven-Year Itch.

How a costume becomes iconic is, however, genuinely interesting. Designers stress that it is not simply the dress but the movie, and that moment in the movie, that is so memorable.

"A director once said to me, 'We want you to design this movie and set a trend, the same way you did on Flashdance'," recalls costume designer Michael Kaplan – whose credits include Blade Runner and Fight Club – in an anecdote in Nadoolman Landis' book Costume Design, a collection of interviews with working costume designers. "I pointed out he had a responsibility in this, too. 'Really? How so?' he asked and I answered, 'The movie has to be a huge hit'."

Consolata Boyle, who designed The Queen and The Iron Lady among many other credits, says "a costume acquires a heightened realism once everything is lit and positioned, with an actor saying certain lines with certain meanings". Durran, who designed the vivid green dress worn by Keira Knightley in Atonement, says she could never have plotted the power and instant fame of that dress.

"The reason that happens is more than the dress itself. It's the way it was shot, the way Keira looked – her hair and make-up – and the way she wore it, the lighting, a whole combination of elements. A costume is a collective effort. Look at the dress in the exhibition and you will see it's only part of the image. It's not the wonderful thing – well, it is a wonderful thing, but it's not the reason the dress is iconic."

The actors who wear them, in fact, probably appreciate the importance of their costumes more intimately than anyone. Nadoolman Landis has included five costumes each for Meryl Streep and Robert De Niro to show how these great actors transform themselves in collaboration with designers.

Actually, the business abounds with stories illustrating this symbiotic relationship. Jeff Bridges famously took to wearing the Dude's dressing gown and patterned drawstring pants all the time when he was filming The Big Lebowski, until even he felt he had merged with the character. Johnny Depp told designer Penny Rose he wanted to be a rock'n'roll pirate – only later revealing he had Keith Richards in mind – as a starting point for Captain Jack Sparrow, one of the most definitive costumes in film history.

When she was promoting The Queen, Helen Mirren would laugh as she confessed to journalists that she cried when she saw what she would have to wear as Elizabeth II. Designer Boyle recalls Mirren overcame her horror quickly. "She just dived in. We had such fun! Obviously, the backstory is this woman who always did her duty, who put self away; in a way, that was what Helen was excavating ... It's the tension inside that woman, doing what is expected always but torn with emotion inside – and all that tension had to be carried in the costume."

A costume designer's primary relationship, however, must always be with the director whose vision she or he is trying to interpret or anticipate. Many directors establish partnerships with costume designers as enduring as their more celebrated relationships with cinematographers. Having worked on eight films with director Tim Burton, Colleen Atwood – herself a significant artist, having won three Oscars (for Chicago, Memoirs of a Geisha and Burton's Alice in Wonderland) describes a working process that never needs to return to first principles.

"I bring him ideas, a few drawings of what I want to achieve, research, textures and materials, then go ahead and do a fitting with the actor," she says. "Then [Burton] comes in and talks about it. Usually it's something like, 'I like this colour; let's keep it that way', or 'let's make it brighter'."

The fact  Burton's films – which include Edward Scissorhands, Sweeney Todd and Mars Attacks! – have some of the wildest imagery in modern cinema is not mentioned. "That is a big misunderstanding people have of Tim," Atwood says. "We don't have to try to make it more extreme ... We want to serve the story. Sweeney Todd is set in the heart of darkest London; we are dealing with a gloomy world. Alice is a fantasy inside her mind that refers to the world she came from; we are enhancing that within the story."

"The most interesting thing about design is who you are working for," says Durran, who has designed three films for Joe Wright and four for Mike Leigh. Current cinema is almost entirely dominated by naturalism, she says; grittiness has taken over from glamour as the highest good.

"But in other instances, film is designed in a symbolic way; costume can be about the feel of things rather than character. Hardly anybody is making those films, but it's important to remember that the 'character approach' is not the only one. Joe always has an overview of the colour of costumes and the colour of scenes that is not a reflection of character; what he's thinking about is what is happening within the scene."

Even within the boundaries of naturalism each film dictates its own reasons, often of a kind that would not occur to anyone outside the design process.

When Edith Head – still the most celebrated of all costume designers, with eight Academy Awards to her name – came to design The Birds for Alfred Hitchcock, his concern was that Tippi Hedren would be wearing the same outfit for most of the film, including a protracted chase.

"He asked her to come up with a colour that would be easy on the audience's eye," Nadoolman Landis says. "It had to be pleasing and not at all distracting so he could build the tension around it – a calm eye in the storm of birds swarming around her. That suit in an eau-de-nil green is so simple, but we remember it because it is so important to the film."

Film production has changed massively since Hitchcock's day, both technically and structurally. Digital cameras and computer image generation or manipulation mean the actual shooting period, even for big films, is much shorter; cast changes are common and sometimes happen overnight; and there is usually much less money but many more nominal producers spread across several continents, whose role on the film is unclear but who expect to be kept in the loop, even to have a right of veto.

Many designers quoted in Costume Design say they don't have time to draw the beautiful sketches we associate with costume design any more; they give their tailors and seamstresses thumbnail designs. Drawings are done after the fact, to be used by the film's marketers.

But costumes are made exactly the way they were a century ago. If an actor is replaced at the weekend by someone else, several centimetres taller or shorter, those new costumes still need to be cut out, dyed and stitched or procured from somewhere by Monday morning in exactly the same way they would have been if there had been months of preparation.

Very recently, Nadoolman Landis tells me, she was on a panel with Kasia Walicka Maimone, costume designer for Wes Anderson's mannered, painterly Moonrise Kingdom. Not only is every frame of the film a precise design in itself, but it is set in the 1960s. She did it in 2 weeks.

No wonder most costume designers say that the most important attribute you need in their game is not a good eye – although that is crucial – but patience. And, of course, a burning passion for movies. You couldn't do it if you didn't love it.

Hollywood Costume is at ACMI, April 24 to August 18. acmi.net.au/costume.