The 20-year-old was reduced to tears during the medal ceremony as the scale of his achievement became apparent.
Murdoch had never beaten Jamieson, 25, over 200m in a major final but produced a British and Commonwealth record of two minutes 7.30 seconds to win gold.
The Olympic silver medallist finished in 2:08:40, whilst England's Andrew Willis took bronze.
"There is no way that just happened. I can't believe it. That was amazing," Murdoch, who posted the fastest time in the heats, told BBC Sport.
"Coming down that last 100m with the crowd it was just incredible and it was a massive PB [personal best] - I'm so surprised."
"I felt great in the heats this morning but I didn't expect that."
"I felt great in the heats this morning but I didn't expect that," Murdoch said Murdoch's time of 2:08:78 in the heats was more than five seconds quicker than his previous best and he shaved just over another second off that time in the final.
That was even more remarkable given the University of Stirling student's only senior international experience was finishing 11th in the 100m breaststroke and 30th in the 50m event in the 2013 World Championships.
He did, however, edge out Jamieson in the 100m to qualify for that first senior world meet.
The reality of what he had done only began to hit home once he stepped on to the podium and heard the roar of the Scottish crowd. Murdoch's tears then flowed during an emotional airing of Flower of Scotland.
Beside him, with a silver medal around his neck, stood a despondent Jamieson.
The Glaswegian had admitted to feeling "some nerves" in the build up to the Games and sought help from a psychologist to help deal with the pressure of being a gold-medal favourite.
The Bath-based athlete is renowned for responding strongly after a disappointing swim and, having finished behind Balfron swimmer Murdoch in the heats, he was expected to deliver when it really mattered.
The Olympian - who grew up training in the Tollcross pool and had told the BBC he was targeting a world record at the Commonwealths - saluted the crowd after they gave him an incredible pre-race reception.
Australian 100m world champion Christian Spenger dominated the opening 100m, but Jamieson's trademark power in the closing stages simply did not materialise, leaving Murdoch to claim victory.
"Ross has been on great form all season and has dropped huge chunks off his best today and deserves to win," said Jamieson, who was holding back tears.
"I wasn't good enough tonight."
A third place finish for Bracknell's Willis was his first major international medal, although he was also hoping for more.
"It was really tough and I was aiming for a faster time like Michael, but I'm on the podium and it's a step in the right direction," he told BBC Sport.
Murdoch produced a stunning British and Commonwealth record of two minutes 7.30 seconds in the final 
Murdoch had never beaten Jamieson over 200m in a major final 
Murdoch posted the fastest time in the heats but was still not expected to win 
"I wasn't good enough tonight," Jamieson conceded
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