Murphy's temporary commission was terminated after the war and he reverted to the rank of sergeant to remain in the Army, Murphy and Wrigley were each awarded the
Air Force Cross in recognition of their achievement. Following disbandment of the wartime AFC, Murphy transferred to its successor, the
Australian Air Corps, on 1 January 1920. On 31 March 1921, he joined the newly established
Royal Australian Air Force (RAAF) as its first airman, literally "Airman No. 1" according to his papers. Nicknamed "
Spud", and described as "immensely capable and popular", he was commissioned as a
flying officer in September that year. Promoted to
flight lieutenant, Murphy was posted to the RAAF Experimental Section under Wing Commander (later Sir)
Lawrence Wackett in November 1926. The following year he took part in a round-Australia survey flight under the command of the
Chief of the Air Staff, Wing Commander (later
Air Marshal Sir)
Richard Williams. Raised to
squadron leader, Murphy was given temporary command of
No. 1 Aircraft Depot at
RAAF Station Laverton, Victoria, in the opening months of 1933. He subsequently took charge of the unit's workshops. Towards the end of 1935, he was responsible for specially modifying a
Westland Wapiti and a
de Havilland Gipsy Moth for
Antarctic conditions, to enable an Air Force team led by Flight Lieutenant (later
Group Captain) Eric Douglas and Flying Officer (later Air Marshal Sir)
Alister Murdoch to rescue explorer
Lincoln Ellsworth, who was presumed lost on a journey across the continent. In 1936, Murphy was selected to join Wackett on a mission to investigate aircraft production overseas with a view to setting up local construction plants. The team determined that the
North American NA-16 was most suitable for Australian conditions and manufacture; following testing of a prototype, designated the NA-33, the design went into production in January 1939 as the
CAC Wirraway. Murphy was promoted to
wing commander in November 1936 and appointed commanding officer of No. 1 Aircraft Depot in January 1938. ==World War II and retirement==