In a dramatic session this morning, the News Corporation chairman and chief executive told the inquiry into press standards that he had "failed" in the phone hacking scandal.
He pointed the finger at senior executives for having "shielded" the extent of hacking at the Sunday tabloid, which was shut down last July.
Asked if he should have been more aware of the situation, the 81-year-old replied: "I also have to say that I failed, and I am very sorry about it."
Murdoch is currently at the Royal Court of Justice for a second day of evidence at the Leveson Inquiry, after yesterday's session focused on his relationship with politicians.
Responding to previous claims that hacking was confined to "one rogue reporter" at the News of the World, Murdoch said that everyone was "misinformed" by executives at the paper.
"I do blame one or two people for that... someone took charge of a cover-up we were victim to and I regret that," he said.
The billionaire apologised to all the "innocent" staff who lost their jobs in the closure of the News of the World, and said that he was "guilty of not having paid enough attention" to the paper while he owned it.
"I was more interested in the excitement of building a new newspaper and doing other things... it was an omission by me," he added.
He expressed "great distress" at being let down by people he had worked with for years, but recognised that the distress of victims of the scandal was even greater.
Murdoch said that he was "sorry" that he did not close the paper years earlier and introduce the Sunday Sun, which was launched in February. He said that the decision was due to the loyalty of the News of the World readership.
He insisted that he is held to "account every day", by rival papers such as The Guardian and The Mirror, but also the public, who can 'vote with their feet'.
As legal action threatens to spread to the US, Murdoch said that News Corp had been through "every email" to be "absolutely certain" that the scandal was only confined to the UK.
"I think we have satisfied ourselves we have great journalists... all over the world," he added.
Earlier, Murdoch said that he was "surprised" by how long email contact between a News Corp lobbyist and Jeremy Hunt's special adviser went on during the Sky bid.
However, he said that Frederic Michel, News Corp's head of public affairs, had not done anything wrong in the contact.
Asked whether he was surprised by the extent of Michel's contact, he said: "I didn't see anything wrong with his activities. Was I surprised it had gone on so long - there were so many emails? Yes."
Hunt's special adviser Adam Smith has quit over the email revelations, and Labour has called for the culture secretary to also stand down.