He was born near Cumnock, Ayrshire in Scotland. In 1877, he walked to Birmingham, a distance of over 300 miles, in order to ask for a job with James Watt, the famous steam engine manufacturers. Matthew Boulton, impressed by Murdoch's wooden hat, made on a lathe of his own design, gave him a job and within a short term he was well respected within the firm. He also became a member of the Lunar Society.
In 1779 he was sent to Redruth in Cornwall as a senior engine erector. While there he occupied his leisure time in design and invention. Among his innovations were Britain's first steam-powered roadster in 1785 and gas lighting in 1792.