The Scot, 23, was in third place and on the tail of the leaders with 200m to go but faded to finish well behind Kenya's Faith Kipyegon, who took the gold.
"I gave it absolutely everything and on the day my legs just weren't in it," Muir told BBC Scotland.
"Sometimes that happens, unfortunately it happened in an Olympic final."
After breaking Dame Kelly Holmes' 12-year-old British record in the 1500m at the London Anniversary Games last month, many felt Muir could come away from Rio with an Olympic medal.
"People look at times and think 'yeah she can get a medal', but there's a lot more to it than that," Muir said.
"My first Olympics, got to the final fine and [finished] seventh. I'm really proud of how I ran, I did everything right. It just wasn't quite in the legs.
"I ran as best I could. There's nothing more I could have given. It didn't happen to be the result that I wanted, but I'm really proud of how I ran."
Muir's compatriot Eilidh Doyle, 29, finished as a fastest loser in the 400m hurdles semi-final to qualify for Friday's final, and says by doing so she has fulfilled a lifetime ambition.
"As a little girl I always wanted to be part of the Olympics because I love the sport - playing it, watching it," Doyle explained.
"As I got older I realised that these things don't happen very easily, you've got to work really hard for them.
"I knew although I'm ranked six in the world that means nothing when it comes to the Olympics and racing.
"Just to be in that final and go and contend with the best in the world, I'm just over the moon. It's a dream come true."
Doyle is refusing to set herself a medal target for the final, instead preferring to focus on producing her best performance on the biggest stage.
"I don't want to think about medals," said Doyle, who won 400m hurdles silver at the 2014 Commonwealth Games in Glasgow.
"I just want to go out there and just give a good account of myself. I want to be able to come off the track knowing I'd given it absolutely everything and that was the best I could do on that day. If I do that I'll be delighted if I come eighth in that final or get on the podium.
"If I can step off the track with my head held high, I'll be delighted."
Laura Muir is proud of the way she ran in the 1500m Olympic final despite slipping out of medal contention on the final lap to finish seventh in Rio.