In 1989 he was an unsuccessful candidate for the Democratic primary nomination for mayor of Pittsburgh, losing to Sophie Masloff (who ran unopposed in the November general election later that year).

Against public opposition,[5][6][7][8] he secured $1 billion (along with Allegheny County Commissioners Bob Cranmer and Mike Dawida) in funding for the development of Heinz Field, PNC Park, and a new David L. Lawrence Convention Center that in 2003 would become the largest certified "green" building in the United States.

[9][10] The Pittsburgh Post-Gazette commented in 1998 that "Allegheny County Commissioners Bob Cranmer and Mike Dawida understand the importance of a strong urban core and, through their partnership, have helped the mayor find ways to do what lesser leadership would considerable unthinkable...

"Big idea" initiatives such as these, combined with the commonwealth-imposed century-old restrictions on annexing any suburbs or consolidating with the county for a "regional" or "metropolitan" tax base to equitably spread costs to commuters and urban dwellers alike and drove the city to the brink of bankruptcy.

[18][19] While at the time, the parking tax was met with ridicule and contempt, it has presently been analyzed as one of the key factors in rejuvenating the downtown core, while encouraging the growth of rapid transit, bike lanes and trails, and "green alternatives", and while providing a fiscal foundation for the city for decades to come.

Prior to the 2001 mayoral election, Murphy allegedly signed the firefighters to a new contract worth $10–12 million with a no-layoff clause in exchange for their vote.

[25][26] While being considered a man with big ideas, Murphy's political skills were questioned later in his tenure as some of his policies slowly wore out relationships with the Pittsburgh City Council and the increasingly Republican and rural-focused commonwealth legislature.

Since leaving City Hall, Murphy and his wife continue to live in their self-restored, 150-year-old farmhouse in North Side of Pittsburgh, where they raised their two daughters, Shannon and Molly, and their son, T.J.

He participated and chaired more that 60 Advisory Services panels in locations as diverse as Singapore, Ireland, Germany, China, the Philippines and more than 50 cities and communities around the United States.