Murdoch was born in Melbourne on 8 February 1909, the third daughter of Marie Grace de Lancey (Forth) and Rupert Greene. Her grandfather, William Henry Greene, was an Irish railway engineer (later one of the three Commissioners of Victorian Railways) who emigrated to Australia and married Fanny, the fourth of the 10 daughters of George Govett. Her mother's ancestors were Scottish and English; one of her maternal great-grandfathers was a lieutenant governor in the West Indies. Elisabeth was educated at St Catherine's School in Toorak, and at Clyde School in Woodend. She married Keith Murdoch, 23 years her senior, in 1928 and inherited the bulk of his fortune when he died in 1952. Apart from Rupert, her children are Janet Calvert-Jones, Anne Kantor and Helen Handbury (1929–2004). At her death, she had 77 direct living descendants (names unknown). Her granddaughter, Elisabeth Murdoch, was prominent in the British business world and was married to Matthew Freud.
Apart from raising her children, Murdoch devoted her life to philanthropy. Before her marriage she worked as a volunteer for the Royal Society for the Prevention of Cruelty to Animals. Dame Elisabeth Murdoch joined the management committee of the Royal Children's Hospital in 1933, serving as its president from 1954 to 1965. A 2003 article in the Melbourne newspaper The Age (see link below) said: "Few can rival Dame Elisabeth's enormous contribution. Her interests are so many they need to be alphabetically catalogued: academia, the arts, children, flora and fauna, heritage, medical research, social welfare. Many of Melbourne and Australia's most cherished institutions, from the Royal Children's Hospital to the Australian Ballet and the Botanic Gardens, have benefited from her involvement. But Murdoch also devoted herself to less popular causes: prisoners, children in care, those battling mental illness and substance abuse."
Murdoch was a Life Governor of the Royal Women's Hospital. She was the patron of the Murdoch Children's Research Institute and of the Australian American Association (Victoria), founded by her husband. She was a patron and founding member of disability organisation EW Tipping Foundation and a founding member of the Deafness Foundation of Victoria. The first woman on the council of trustees of the National Gallery of Victoria, Murdoch was a founding member of the Victorian Tapestry Workshop. She was a member of the Patrons Council of the Epilepsy Foundation of Victoria. Her garden, "Cruden Farm", at Langwarrin, is one of Australia's finest examples of landscape gardening and is regularly open to the public. It was originally designed by Edna Walling.1909–1928: Miss Elisabeth Joy Greene
1928–1933: Mrs Elisabeth Joy Murdoch
1933–1961: Elisabeth Joy, Lady Murdoch
1961–1963: Elisabeth Joy, Lady Murdoch CBE
1963–1989: Dame Elisabeth Joy, Lady Murdoch DBE
1989–2012: Dame Elisabeth Joy, Lady Murdoch AC DBE
For her service as President of the Royal Children's Hospital, Melbourne, Murdoch was appointed a Commander of the Order of the British Empire, Civil Division (CBE) in the 1961 Birthday Honours list. For her role in building a new children's hospital in Melbourne, she was appointed a Dame Commander of the Order of the British Empire, Civil Division (DBE) in the 1963 New Year Honours list. In June 1989, she was appointed a Companion of the Order of Australia, Civil Division (AC) for services to the community also receiving the Centenary Medal in 2001 for her philanthropic services to the Australian arts community.
She also held an award from the French government for funding an exhibition of works by the French sculptor Auguste Rodin in Melbourne in 2002. She was an honorary fellow of the Australian Institute of Landscape Architects and helped to establish the Elisabeth Murdoch Chair of Landscape Architecture and the Australian Garden History Society. In 1968, Murdoch was awarded an honorary Doctorate of Laws by the University of Melbourne in acknowledgement of her contributions to research, the arts and philanthropy. Trinity College, Melbourne installed her as a Fellow in 2000. Following extensive donations to the Royal Botanic Gardens, Melbourne, a Tasmanian species of Boronia (B. elisabethiae) was named after her. In 2004, a high school, Langwarrin Secondary College, was renamed Elisabeth Murdoch College to honour her work in the local community. In 2009, the main performance venue of the Melbourne Recital Centre was named in her honour. In 2010, Geelong Grammar School completed a new girls' boarding house named in her honour.
Murdoch's charity work earned her the Victorian of the Year award in 2005 at age 96. In January 2007, aged 97 years and 11 months, she surpassed Dame Alice Chisholm as Australia's longest-lived dame.
Murdoch was a patron of the Australian Family Association.
On 5 December 2012, Murdoch died in her sleep in Melbourne, Victoria at the age of 103.