U.S. District Judge Sam Haddon ordered Murphy to spend four months of his probation in a prerelease center and required him to pay $17,325 in restitution.
Murphy was accused of stealing 13 dinosaur bones from central Montana's Hell Creek badlands in 2006. He pleaded guilty in April to theft of government property.
The case provided a rare glimpse into the black-market fossil trade while sinking the reputation of the 51-year-old, self-taught paleontologist who rose to fame on his discovery of the world's best-preserved fossil, known as Leonardo, in 2000.
Murphy was sentenced last month to 60 days in jail on a separate state count involving a stolen raptor fossil. Federal prosecutors wanted him to serve an additional 10 months on the federal charge.
"Murphy's sentence should send a message to those that engage in for-profit resource hunting and amateurs alike," U.S. Attorney William Mercer wrote in the government's pre-sentencing recommendation.
The government sought the $17,325 in restitution for damage done to public lands during Murphy's excavations.
Murphy sought the more lenient sentence of three years probation plus restitution.
"This case is a lesson well learned," Murphy's attorney, Michael Moses, wrote in documents submitted to the court.
Murphy runs a business in Billings that charges customers $200 a day to participate in dinosaur digs.
He was paleontology director at the Dinosaur Field Station in Malta, Mont., for 15 years before resigning in July 2007 - about the same time state and federal authorities began investigating his activities.
Murphy's theft case was pending when President Barack Obama signed a law in March setting a penalty of up to five years for stealing bones or other fossils from public land.
The Paleontological Resource Protection Act is the country's first-ever law to specifically protect fossils. It came too late to apply to Murphy's case.