Born in Ketchikan, Alaska to Polish-American parents. Murkowski earned a B.A. in economics from Georgetown University in 1980, and a J.D. from Willamette University College of Law in 1985.

She was an attorney in Anchorage, Alaska from 1985 to 1998. She also served, from 1990 to 1991, on the mayor's task force on the homeless.

In 1998, she was elected to the Alaska House of Representatives and had been elected the House Majority Leader for the 2003-2004 session, but she resigned from the House in December 2002, when she was appointed by her father, Governor Frank Murkowski, to his own unexpired senate seat because he had been elected governor.

She was elected to a full six-year term against former Governor Tony Knowles in the 2004 election, after facing a primary challenge due to charges of nepotism. It is likely that the circumstances of her appointment reduced her margin of victory, but they were apparently insufficient to overcome the Republican majority of Alaska. Near the end of the campaign, senior senator Ted Stevens shot campaign ads for Murkowski and warned the public that if a Democrat replaced Murkowski they were likely to receive fewer federal dollars.

Murkowski is known to be fairly moderate, and is one of ten Republican Senators who have refused to commit to Bill Frist's nuclear option to end judicial filibusters. Even though her voting record on abortion is mixed, Murkowski is one of a number of pro-choice Senate Republicans. She supports oil exploration in ANWR, whereas some other moderate Republicans do not. She has claimed that recent technological developments have reduced the environmental risks of drilling in ANWR.

Senator Murkowski is a member of The Republican Main Street Partnership and supports stem cell research. She is also a member of The Republican Majority For Choice, Republicans For Choice and The Wish List (Women in the Senate and House) a group of Pro-Choice women Republicans.