In the sweltering Perth heat, Murray followed up Watson’s win with a straight sets victory of his own, defeating Alexander Zverev 6-3 6-4 as he bounced back from his surprise singles loss to Nick Kyrgios earlier in the week.
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However, it was not enough to advance to the final as Australia Green won a thrilling tie against France.
Zverev, though, refused to balk and continued to try and push Murray.
France must beat home favourites Australia for Britain to progress, but either way Murray insists getting used to the weather has been a useful experience ahead of the Australian Open, which starts in Melbourne on January 18.
Nick Kyrgios and Daria Gavrilova will attempt to end Australia’s 17-year Hopman Cup title drought when they front up in Saturday’s final against Ukraine at Perth Arena.
But he fought off the danger and the British pair went on to win the mixed doubles by the same 6-3 6-4 scoreline.
Watson got her country on the board with an impressive 6-3, 6-4 success against world number 32 Sabine Lisicki, before two-time Grand Slam champion Murray wrapped up the victory, beating Alexander Zverev 6-4, 6-4.
“I have played three quality matches and put in a lot of training”, Kyrgios said. Australia will play Ukraine in the final, with Kyrgios and Gavrilova set to take on Alexandr Dolgopolov and Elina Svitolina.
Former Wimbledon finalist Lisicki is on the comeback trail after being sidelined by injury for the second half of 2015 and had her chances against Watson, but could not match her opponent’s consistency.
Murray has named a six-strong squad of Johanna Konta, Heather Watson, Laura Robson, teenager Katie Swan and doubles players Jocelyn Rae and Anna Smith, with the final four to be confirmed next month.
And he saved the only break point against him with an ace when trailing 3-2 in the second set.
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Australia Green were down a match point in the mixed doubles match tiebreak.
