The Sri Lankan spinner, who is free to play for Lancashire following Sri Lanka's exit from the World Cup, bagged his first championship victim when Mark Chilton caught the opener Mark Wagh for 32.
That left the visitors still well-placed on 81 for 1 but Muralitharan's wily off-spin soon brought him more wickets and cut through the Warwickshire order. David Penney and Neil Smith (15) both fell leg before - Penney without scoring - but the Sri Lankan's most-prized victim was the opener Nick Knight. He was caught behind for 82 while Tony Frost and Graeme Welch also fell victim to Lancashire's new signing.
Alex Tudor's hopes of an England recall ahead of the forthcoming Test series against New Zealand were boosted as the Surrey pace bowlers also took seven wickets - finishing with 7 for 77 and skittling out the county champions Leicestershire for 272 with the last five wickets tumbling for just five runs.
Tudor struck three times early on to keep Leicestershire down to 176 for 5 at Grace Road. The start was delayed by the Duke of Kent opening the new media centre at the ground but 44 from the opener Vince Wells helped the hosts make up for lost time - until Tudor struck. He claimed Wells, Iain Sutcliffe (17) and Ben Smith (3) as the leaders hit back hard against the reigning champions.
Aftab Habib, with 60, and the Leicestershire wicketkeeper Paul Nixon (56) did the bulk of the scoring before the collapse.Reuse content