The 56-year-old was charged with a single count of involuntary manslaughter in the death of the singer.
Television news vans lined the Airport Branch of Los Angeles Superior Court earlier in the day. Crews were standing by waiting for the arrival of the Houston cardiologist.
Murray appeared in court in a gray suit and burgundy tie as Jackson's father Joe, mother Katherine, and siblings LaToya, Jermaine, Tito, Jackie and Randy watched from courtroom seats behind prosecutors.
Neither Murray nor the Jacksons showed much emotion as the six-foot-five Murray entered his plea through his attorney Ed Chernoff, but as he emerged from court, Joe Jackson declared, "My son was murdered."
"We need justice," he added before leaving with family members in a fleet of Cadillac Escalades.
The judge set bail at $75,000, three times more than the amount people normally face after being charged with involuntary manslaughter. Murray posted it about two hours later and was released.
Outside the courthouse Chernoff said Murray plans to return to practicing medicine in Nevada and Texas while he awaits trial. The judge ordered him to return to court April 5 for a preliminary hearing.
"He'll be back in Vegas this week, he'll open his medical practice," Chernoff said.
Meanwhile, Superior Court Judge Keith L. Schwartz set the ground rules for Murray.
"You are not going to be able to travel out of the country. You are going to have to stay in the country, in the United States," said Judge Schwartz.
He then imposed restrictions on his practice as a doctor.
"What I am going to do is both in California and the state of Texas your practice is going to be restricted in this area," said Judge Schwartz. "You may not, under any circumstances, use any anesthetic such as propofol. You are not to use it, or prescribe it. You are not to have it in any manner whatsoever."
Murray had been hired as the singer prepared for a series of concerts in London. He says he had been treating Jackson for insomnia. He has admitted to administering the powerful drug propofol and other sedatives, but maintains nothing he gave Jackson should have killed him.
Murray came to Los Angeles several days ago to surrender, but his attorneys and prosecutors had a disagreement about how he would be taken into custody. The doctor's legal team says police wanted to arrest him, put him in handcuffs and escort him to the courthouse in front of news cameras.
Many fans gathered in front of the courthouse Monday to voice their opinions about Dr. Murray.
"I feel like he should go to jail and there should not be a time limit," said Michelle Perell, a Jackson fan.
"He was careless. It was all about money. He needed money for his kids and his house. He was selfish," said Monique Ranesome, a Jackson fan.
"He took the best entertainer from this planet and he needs to punished for that," said Perell.
Propofol is normally administered only in hospital settings. The coroner says that the combination of sedatives and the anesthetic caused Jackson's death.
Murray has been at the center of the police investigation since the singer's death in June.
He faces up to four years in prison if convicted.
The Associated Press contributed to this report.