The native of Thornhill, Ont., lost to Murray 6-4, 6-4, 6-2 on Monday in the fourth round of the U.S. Open.
"It was a tough match, he was just too good," said Raonic. "I was never comfortable and he played extremely well. This was a big loss, I really gave everything out there and I've never felt such a defeat."
Murray, still seeking his first Grand Slam title, reached the quarter-finals at an eighth consecutive major tournament by beating the 15th-seeded Raonic.
Raonic was trying to become the first Canadian man in a Grand Slam quarter-final in the Open era, which began in 1968.
Canadian women remain the only players to have gone to the last eight in a Grand Slam, most recently through Patricia Hy-Boulais at the 1992 U.S. Open.
Raonic reached this stage at a major for the second time after getting to the last 16 from a qualifying start at the Australian Open last year.
"This was my eighth Grand Slam and I'm pretty new to this," said Raonic. "I've only played here twice. Sometimes I get frustrated with myself."
Raonic is the third Canadian to reach the round of 16 at a Grand Slam in the Open era, after Montreal's Martin Laurendeau at the 1988 US Open and Toronto's Daniel Nestor at Wimbledon in 1999.
He stands 1-7 against top five opponents, with his only win coming against Murray on clay in Barcelona last spring.
"I need to improve a lot of things in my game if I'm going to compete with guys at the top level," said Raonic. "But I also want to learn as much as I can. Every experience at this level is a new one. I have to deal with them the best I can."
Despite his disappointment, Raonic will rise to an ATP ranking of around 14th next Monday.
Raonic never got a break point on the Murray serve and managed only 14 aces — about half his average at the event in the first three rounds. He converted on three of 11 break points and lost his own serve four times in a disappointing evening.
"I felt like I was doing it well most of the time, except maybe a few shots I didn't go for as much in the beginning just because I didn't know how to really read it," said Raonic.
The match was moved to an earlier start because of rain clouds moving into the area, but the contest concluded without interruption.
"It's tough in there (Arthur Ashe Stadium), it's something I haven't really experienced," said Raonic. "It's windy constantly and coming from all different directions. So it was hard to really just step in on the ball."
Murray played smart tennis to nullify Raonic's huge serve, using his returning skills to dominate.
The third-seeded Murray created his first chances in the eighth game of the opening set, forcing Raonic to save two break points before finally dropping serve for 3-5.
A game later, Murray secured the set on his second opportunity from a Raonic return wide.
The balance of power stayed the same in the second set. Raonic lost serve for 2-3 after again saving two break points but failing on a third.
Raonic managed to save a pair of set points, holding serve for 4-5 before Murray took a two-sets-to-love lead as he fired an ace on the first of three more match points, a shot which Raonic unsuccessfully challenged with the electronic linecalling system.
The third set was all Murray, with Raonic struggling to no avail as the Scot closed out the win thanks to breaks in the third and seventh games, sealing it on his first match point from Raonic's return long.
Murray, the 2008 U.S. Open runner-up, and his coach, Ivan Lendl, are the only men to lose their first four major finals.
Next for Murray is a match against No. 12 Marin Cilic. Murray leads their head-to-head series 6-1, but his only loss to Cilic came at Flushing Meadows in the fourth round in 2009.