Two former News Corp. employees said they told Murdoch several years ago about a tip that suggested illegal activity at the company was widespread.
The presumed heir to Rupert Murdoch's media empire told Britain's Parliament he didn't know of any evidence that the hacking went beyond one reporter.
The claim brings more trouble for the embattled James Murdoch, who heads the Europe and Asia operations of his father's News Corp., as his family fights a scandal that has already cost the shutdown of News of the World, two top executives and a $12 billion-dollar bid for control of lucrative satellite broadcaster British Sky Broadcasting.
James Murdoch, who was not testifying under oath at Tuesday's parliamentary hearing, could face sanction if it becomes clear he deliberately misled lawmakers - but the prospect is highly unlikely. The last time the House of Commons fined anyone was in 1666.
The scandal exploded with revelations that News of the World journalists hacked the phone of a 13-year-old murder victim while police were still searching for her and broadened to include claims reporters paid police for information.
The Associated Press contributed to this report.