On 21 May 1994 an event was organised by Sinn Féin's Prisoner of War Department to raise funds for the families of IRA prisoners at the Widow Scallans pub in Dublin's Pearse Street. Doherty was working as a doorman at the pub, and became suspicious of two men attempting to enter the pub carrying a holdall at 11 pm. Doherty challenged the men in order to prevent them entering the pub, was shot three times and died later in hospital.Another doorman, Paddy Burke, was seriously injured when he was shot in the throat through the door of the pub after he closed it to prevent the gunmen entering. The gunmen left the scene in a car driven by a third man, leaving behind the holdall which contained an 18 lb bomb. The bomb's detonator exploded as people attended to Doherty and the other injured doorman, but the main explosives failed to ignite.The Gardaí stated a massacre had been avoided due to the bomb failing to explode properly.
The attempted bombing was the first in Dublin since the 1970s, and Doherty was the first person killed in the Republic of Ireland by loyalist paramilitaries since November 1975.The UVF issued a statement claiming responsibility for the shootings and attempted bombing.

The IRA issued a statement that Doherty had been a member of the organisation, saying that he "died heroically in the defence of others at Widow Scallans . . . his courage and quick thinking during the attack undoubtedly saved many lives". As Doherty's coffin was being removed from his home in Finglas a paramilitary display took place, with a ten-strong IRA colour party dressed in leather jackets and berets saluting his coffin, which was draped in the Irish Tricolour with a beret and pair of black gloves placed on top. Doherty was buried at Glasnevin Cemetery, where Martin McGuinness gave the oration, stating:
We have come to bury a brave republican Volunteer . . . As far as I am concerned he was a freedom fighter, a freedom seeker. He was trying to bring about a democratic Ireland. The opposition parties are nothing short of Quislings and West Brits. They don't want to talk about the causes of the conflict. Sinn Féin is trying to get all the parties involved in a Peace Process. We will not be distracted from that process.
Photos of the paramilitary display at Doherty's funeral appeared in Irish newspapers causing John Bruton, the leader of opposition party Fine Gael, to criticise the government during a debate in Dáil Éireann. Bruton called the display "appalling, provocative and dangerous for everybody living in this city", and demanded the government enforce the law, which resulted in the debate being adjourned for thirty minutes in "uproar". A spokesman for the Fianna Fáil government stated that similar displays had occurred when Fine Gael were in power.
An inquest into Doherty's death in November 2004 returned a verdict of unlawful killing by person or persons unknown. In 2006 a Garda superintendent stated the investigation into Doherty's death was ongoing,and that "We still have an unsolved murder and the file remains open. To date, no one has been made amenable". Doherty's family believe the Irish authorities are withholding key information about the case, and are demanding answers from the Irish government.Sinn Féin justice spokesman Aengus Ó Snodaigh pledged to raise this issue with the Minister for Justice, Equality and Law Reform, stating “Clearly the Irish government has very serious questions to answer about the ability of unionist death squads, led frequently by British agents, to attack and target Irish citizens with apparent impunity in this jurisdiction".Doherty is regarded as a martyr by Irish republicans, with the Clonakilty cumann of Sinn Féin and the Martin Doherty Republican Flute Band named after him. An annual commemoration march from the Dick McKee memorial in Finglas village to nearby Glasnevin Cemetery takes place each year.
