The community was named for George Murray, a mining prospector. Murray was one of several boisterous mining camps that became active in the late 1880s in Northern Idaho. Mines operated in the area from the 1880s to the 1950s. There was never a Northern Pacific line serving Murray. The line was built by the Idaho Northern Railroad in 1908. The Idaho Northern was taken over by the OWR&N on March 1, 1911. It served as a branch line from Enaville, Idaho until the 1933 flood washed out much of the line. It was then abandoned. A Northern Pacific railroad line served the community for two years during the 1910s. A post office was established at Murray in 1884, and remained in operation until 1959. When roads was rebuilt over the dredge spoils in 1997 - 1998, many gold nuggets were found. 
Today Murray is inhabited by prospectors, loggers, and retirees. Two businesses remain open, the Sprag Pole Restaurant and Museum and the Bedroom Goldmine Bar. The Sprag Pole occupies one of the town's original buildings, built in 1884.
- Earl, Larry W. (Nov 2, 1990). "Early Idaho mining district makes great driving tour". Spokane Chronicle. p. 13. Retrieved 18 October 2015.
- History of Selected Mines in the Pine Creek Area, Shoshone County, Idaho by Victoria E Mitchell, Idaho Geological Survey
- "Shoshone County". Jim Forte Postal History. Retrieved 14 April 2015.
- Derig, Betty. Roadside History of Idaho. Missoula: Mountain Press. p. 324. ISBN 0878423273.
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