Murray's defense attorney Ed Chernoff entered the not guilty plea before the physician was ordered to surrender his passport and post bail of 75,000 dollars ahead of a hearing on April 5.
Murray, the last person to see Jackson alive, has admitted administering drugs to the singer to help him sleep shortly before his death at a rented mansion in Los Angeles on June 25 last year.
The Los Angeles County District Attorney's Office said in a statement Monday that Murray "did unlawfully, and without malice, kill Michael Joseph Jackson ... in the commission of an unlawful act."
Murray, who could face up to four years in prison if convicted, has acknowledged giving the anesthetic propofol to Jackson following the singer's "repeated demands/requests" for the drug.
Propofol is a potent anesthetic used to render patients unconscious before major surgery. Medical experts say it should only be used and administered by trained staff under hospital conditions.
The Los Angeles County's coroner's office blamed Jackson's death on "acute propofol intoxication."
Monday's long-anticipated hearing took place in a circus-like atmosphere, with members of Jackson's family, including parents Katherine and Joe, present in court to face the man accused of killing "the King of Pop."
Outside, Jackson devotees gathered to protest the involuntary manslaughter charge, saying Murray should have been charged with murder.
"We want justice for Michael," said Michelle Perell, 26. "He (Murray) should be charged with first or second degree murder and go to jail for life. He killed the most beautiful person in the world."
Other fans brandished banners which read: "The World Wants Justice for Michael" and "Justice for Michael Jackson." Another read: "Conrad Murray is a Murderer: Arrest him in handcuffs."
Brian Oxman, a lawyer for Jackson's family, has criticized the involuntary manslaughter charge, saying it amounted to a "slap on the wrist.
"I don't think it would satisfy anybody, the millions of fans around the world," Oxman told CBS television.
"That is just a slap on the wrist and a slap in the face because Michael Jackson was someone who we knew was in danger of being brought to his knees, brought to his death by the use of these medications."
The manslaughter case against Murray was built during a prolonged investigation which saw raids on the doctor's offices in Houston and Las Vegas.
According to affidavits unsealed during the investigation, Murray told investigators he had feared Jackson was becoming addicted to propofol and that he was trying to wean him off the drug at the time of his death.
Murray, who had been hired by Jackson in April 2009 as the singer prepared for a gruelling series of comeback concerts in London, allegedly told investigators he left the singer alone for a few minutes before returning to find he was not breathing.
Murray has insisted that he didn't give Jackson anything that should have caused the singer's death.
In a one-minute video posted on YouTube in August, Murray assured his patients that he had told the truth and said he had "faith the truth will prevail."
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