Murdoch stayed seated when the man tried to throw the pie at him as he reportedly muttered, "You greedy billionaire." A News Corp. attorney partially blocked the attack and Murdoch's 42-year-old wife, Wendi Deng, slapped the prankster.
Murdoch was not hurt, but the hearing was briefly suspended.
Media reports identified the protester as Jonnie Marbles, a British comedian. Just before the attack, he wrote on his Twitter: "It is a far better thing that I do now than I have ever done before #splat," a slightly altered quotation from the last sentence of Charles Dickens' "A Tale of Two Cities."
The incident happened about two hours into the hearing. Police said he was arrested on suspicion of assault during a public meeting.
When the testimony resumed, the 80-year-old billionaire simply shed his splattered jacket and continued answering questions.
At the beginning of the televised hearing, Murdoch declared that his appearance before a British parliamentary inquiry was "the most humble day of my life," taking a contrite tone before launching into a tense question-and-answer session with lawmakers.
It was just two weeks ago that Murdoch senior shut down his British tabloid News of the World after reports that its employees illegally hacked into the voicemails of celebrities, politicians and even a 13-year-old murder victim.
Murdoch said he was not personally responsible for the hacking scandal, saying he only checked in with the News of the World paper once a month.
Appearing alongside Murdoch was his son James, who told British lawmakers that "these actions do not live up to the standards our company aspires to."
"I would like to say as well, just how sorry I am, and how sorry we are to particularly the victims of illegal voicemail interceptions and to their families," he said.
James Murdoch said the company acted as swiftly and transparently as possible, while the elder Murdoch acknowledged he did not investigate after former News of the World chief Rebekah Brooks said the tabloid had paid police officers for information.
"The News of the World is less than 1 percent of our company. I employ 53,000 people around the world," Rupert Murdoch said.
Murdoch also said he was unaware his company had paid out large sums - more than $1 million in one case - to settle lawsuits filed by victims who said their phones were hacked.
"Were mistakes made within the organization? Absolutely. Were people I trusted, or they trusted, badly betrayed? Yes," Murdoch testified.
Murdoch told the panel he has not seen any evidence his organization hacked into the voicemails of Sept. 11 victims.
Brooks also spoke and apologized at Tuesday's hearing. She is one of two News Corp. executives who have resigned because of the scandal.
Brooks was arrested Monday.
The Associated Press contributed to this story