Murray was born in the Bronx, New York on September 23, 1980 to poor and drug-addicted parents, both of whom would later contract HIV. She became homeless just after she turned 15, when her mother died of AIDS in 1996, and her father moved to a homeless shelter. Despite her late high school start and lack of a stable home, Murray began attending the Humanities Preparatory Academy in Chelsea, Manhattan, graduating in two years. She was awarded a New York Times scholarship for needy students and was accepted into Harvard University, matriculating in the fall semester of 2000. Her older sister Lisa graduated from Purchase College in New York State and is a school teacher for children with autism.
In late 2006, her father died of AIDS. She returned to Harvard in 2006 and graduated in June 2009. As of August 2009, she began taking graduate courses at Harvard Summer School with plans to earn a doctorate in clinical psychology and become a counselor.
She is the founder and director of Manifest Living and a motivational speaker. A made-for-TV film about Murray's life Homeless to Harvard: The Liz Murray Story, was released in 2003. Liz Murray's New York Times (US) and Sunday Times (UK) bestselling memoir "Breaking Night" was released in September 2010.
On May 19, 2013, she was awarded an honorary doctorate of public service and gave the commencement address at Merrimack College in North Andover, Massachusetts.