Murphy began racing in 1875 and was one of the first jockeys to pace his mount for a charge down the homestretch—a technique soon described as the “grandstand finish.” He rode upright and urged his mounts on with words and a spur rather than the whip. His win of the Travers Stakes at Saratoga Springs in 1879 catapulted him to national fame. He rode in the Kentucky Derby 11 times and was the first jockey to win successive Derby crowns and the first three-time winner, in 1884, 1890, and 1891. In 1884 he won the first American Derby in Chicago, the most prestigious race of the era. He won this race again in 1885, 1886, and 1888. He also won a celebrated match race against fellow Hall of Famer Edward (“Snapper”) Garrison in 1890. Murphy's career winning percentage of 34.5 has never been equaled.

Even though Murphy rode before jockeys received a share of the winnings, he was the highest-paid athlete in the United States, earning close to $20,000 a year at his peak in the late 1880s. By the mid-1890s, however, his ongoing battles with weight gain and alcoholism had severely curtailed his career.