Universal Studios signed Murphy to a seven-year studio contract at $2,500 a week (). His first film for them was as Billy the Kid in "The Kid from Texas" in 1950. He wrapped up that year making "Sierra" starring Wanda Hendrix, who by that time had become his wife, and "Kansas Raiders" as outlaw Jesse James. Universal lent him to MGM in 1951 at a salary of $25,000 to play the lead of The Youth in "The Red Badge of Courage", directed by John Huston. Murphy and Huston worked together again in the 1960 film "The Unforgiven".