Murray joined the British army in 1739/40 and served in the West Indies and Europe. Sent to North America in 1757 as a lieutenant colonel during the Seven Years' War, he commanded a brigade in 1758 during the successful British siege of Louisbourg, in what is now Nova Scotia, under Jeffery Amherst. He was one of General James Wolfe (Wolfe, James)'s three brigadiers in the British expedition against Quebec in 1759. After the British captured the city, Murray was made its military governor. When the French capitulated in 1760, he became military governor of Quebec district; he became the first civil governor of Quebec after its formal cession to Great Britain in 1763.

As governor, Murray opposed repressive measures against French Canadians, and his conciliatory policy led to charges against him of partiality. Although exonerated, he left his post in 1768 and was appointed governor of Minorca in 1774. He surrendered to French and Spanish troops there in 1782, for which he underwent a court of inquiry in England; after being acquitted, he was made lieutenant general (1772) and later a full general (1783).