John and Daniel Murphy were part of the Stephens-Townsend-Murphy Party, the first immigrant party to bring wagons across the Sierra Nevada to Sutter's Fort in 1844. They earned a living as merchants, but like many others, began prospecting when the California Gold Rush began. They first started in Vallecito, which was known as "Murphys Old Diggings," before moving to another location in 1848 which became "Murphys New Diggings," "Murphy's Camp," and eventually just "Murphys."
The placer mining in this location was wildly successful. Miners were limited to claims of 8 square feet (0.75 m2) and yet many were still able to become rich. The Murphy brothers themselves, however, made far more money as merchants than as miners. In fact, John was so successful that he left town at the end of 1849 and never returned, having amassed a personal fortune of nearly $2 million. Roughly $20 million in gold was discovered in Murphys and the surrounding area. Two of the richest diggings were named Owlsburg and Owlburrow Flat.gold largely played out, Murphys is a small tourist Mecca, on route to Big Tree State Park, Bear Valley Ski Resort, and not too far from Yosemite National Park, by California driving standards. Trees provide shade in the 90 degree summer days, and there are plenty of places to eat and drink along the main drag.