He was born in New Haven, Connecticut of Irish Catholic extraction, and attended Yale University. He worked as a tool maker for the Ford Motor Company, as a miner, a real estate agent, and a night club dancer.

In 1927 he appeared on Broadway, partnering with his wife Julie Johnson as a dance act. When Johnson decided to retire from show business in 1935, Murphy moved the family to Hollywood, appearing in several musicals and comedies until 1952. During World War II he appeared in several patriotic films designed to increase morale in the U.S., including the 1943 movie This Is the Army in which he plays a thinly fictionalized version of Irving Berlin.

He was the president of the Screen Actors Guild from 1944 to 1946. He was a vice president of Desilu Studios and of the Technicolor Corporation. He was director of entertainment for presidential inaugurations in 1952, 1956, and 1960.

In the 1950s, Murphy entered politics as chairman of the California Republican State Central Committee. In 1964 he was elected to the United States Senate; he defeated Pierre Salinger, who had been appointed several months earlier to serve the remainder of the late Clair Engle's unexpired term. Murphy served from January 1, 1965 to January 3, 1971. In 1968, he served as the chair of the National Republican Senatorial Committee. Murphy assumed his seat two days early, when Salinger resigned from the seat in order to allow Murphy to gain an edge in seniority. Murphy was then appointed by Gov. Pat Brown to serve the remaining two days of Salinger's term. He was an unsuccessful candidate for reelection in 1970, and subsequently moved to Palm Beach, Florida, where he died at the age of 89 from cancer.

During his Senate term, Murphy suffered from throat cancer, forcing him to have his larynx removed. He was unable to speak above a whisper for the rest of his life.

George Murphy was the subject of a song by satirist Tom Lehrer celebrating his appointment in which Lehrer declared in mock vaudeville style: "Oh, gee it's great, at last we've got a senator who can really sing and dance." Lehrer also alluded sarcastically to an infamous remark Murphy once made during a debate about the bracero program that granted temporary work visas to Mexican migrant farmhands:

Should Americans pick crops? George says no; 'Cuz no one but a Mexican would stoop so low. And after all, even in Egypt, the Pharaohs Had to import -- Hebrew braceros.

Murphy had stated that Mexicans were genetically suited to farm labor; because they were "built lower to the ground," it was supposedly "easier for them to stoop." Oddly, some years earlier, in 1949, Murphy himself had starred next to Mexican actor Ricardo Montalban in the film Border Incident, which cast the exploitation of the braceros in a deservedly negative light.

Murphy's move from the screen to politics paved the way for the successful transitions of actors such as Ronald Reagan and later Arnold Schwarzenegger. Indeed, Reagan's nascent rise was also pondered by an incredulous Lehrer, in the opening lines of the same 1965 song:

Hollywood's always tried to mix Show business with politics. From Helen Gahagan To. . . Ronald Reagan??

This connection is also referred to by folk singer Phil Ochs on the track "Ringing of Revolution", when Ochs describes a fictional film based on that song, and Murphy is played by Reagan.

Not surpisingly, Ronald Reagan once famously referred to George Murphy as "...my John the Baptist" (in a political sense).