Masterson attended Bethel College in Mishawaka, Indiana, where he played as a starting pitcher. While at Bethel, he hit 10 home runs (HR) during his sophomore year. He then attended San Diego State University. In 2005, Masterson played collegiate summer baseball for the Wareham Gatemen of the Cape Cod Baseball League (CCBL). He posted a 1.15 ERA with 39 strikeouts in 31.1 innings pitched. In 2017 he was inducted into the CCBL Hall of Fame.

In 2006, Masterson was named to Baseball America’s short season all-star team. Masterson converted to starting pitching in early 2007, after a stint as a relief pitcher for Short Season Lowell in 2006.

Baseball America rated Masterson as the 64th-best overall prospect for their 2006 Major League Baseball draft projections. The Boston Red Sox selected him in the second round. Dan Madsen signed him. Masterson began as both a starter and reliever in his minor league career for the Lowell Spinners. In 2007, his second season, the club promoted him from the Class A Lancaster JetHawks to the Double-A Portland Sea Dogs. His twelve wins that season ranked second among all Red Sox minor leaguers.

Following the end of the season Masterson underwent surgery to repair a torn labrum in his non-throwing shoulder. The surgery was required after enduring an injury in 2007 as a member of the Red Sox.

Masterson married Meryl Ham on November 3, 2007. Masterson is a Christian and often speaks of the importance of God in his life. He spoke at the Pentagon’s weekly prayer breakfast in June 2009.

After five starts with the major-league club, it was announced that he would stay in the majors through Daisuke Matsuzaka’s return from the disabled list (DL) due to Bartolo Colón’s back injury. On July 7, 2008, Masterson was sent back to the Pawtucket Red Sox, a move manager Terry Francona stated was made to transition Masterson from a starter to a relief pitcher. Masterson was recalled on July 20 due to an injury to David Aardsma In his first relief appearance, he was solid against the Seattle Mariners, shutting down the hitters and working 2 ⁄3 scoreless innings at Safeco Field in Seattle.

In 2009, Masterson began the season in the bullpen while also starting six games before being traded to the Cleveland Indians.

On July 31, 2009, Masterson was traded by Boston along with minor league prospects Nick Hagadone and Bryan Price to the Cleveland Indians in exchange for Victor Martinez.

Masterson enjoyed his first full season as a starter in 2010, but he once again failed to make an impact with the Indians and finished with a 6–13 record in 29 starts. Nevertheless, Masterson seemed to save his best stuff for when he was facing his former Red Sox teammates. He pitched the first shutout of his professional career on June 9 of that season, a two-hit, 11–0 victory against Boston at Progressive Field, in which he struck out six and allowed two singles and two walks.

On April 5, 2012, the Indians made Masterson the Opening Day starter for the first time in his career. The game was against the Toronto Blue Jays in what proved to be the longest Opening Day game in major league history, a 7–4 loss in 16 innings. He completed eight innings, giving up two hits and one run while striking out 10, and earned a no-decision. However, he regressed in his third season with the Indians, finishing 11–15 with a career-worst 4.93 ERA in 34 starts. The Indians hired Francona to be their manager the following October, reuniting the pitcher with his former manager.

For the 2013 season, the Indians again named Masterson the Opening Day starting pitcher. He defeated Blue Jays’ reigning NL Cy Young Award winner R.A. Dickey, acquired in the prior off-season from the New York Mets. In his next start, his second win came against the reigning American League Cy Young winner, David Price of the Rays. According to the Elias Sports Bureau, Masterson became just the third player in MLB history to defeat both reigning Cy Young winners in the same season – and the first to do so in his first two starts of the season.

Masterson and his wife Meryl founded the non-profit Fortress Foundation in 2013 with the help of business partner Matt Zappasodi and Cullinane Law. In February 2013, they partnered with Not For Sale Team.

In November 2013, they worked with the Feed Their Future campaign with Mark Zimmerman from Moody Radio Cleveland and Bright Hope in Nairobi, Kenya. They partnered again in April 2013.

With his sixth campaign about to begin and no contract, Masterson was eligible to become a free agent for the first time in his career. He was also arbitration-eligible. Instead, Masterson and the Indians agreed to a one-year, $9.7 million contract in February, 2014, for the 2014 season. The two parties also began talks for a contract extension beyond 2014. However, the next month, discussions were ended until after the season. Masterson had offered the club extensions for $17 million per year in separate offers of two and three years, with option years, but that was more than the Indians were willing to pay. A pitcher with similar career achievements, Homer Bailey, had signed an extension for more years with the Cincinnati Reds at $17.5 million per year.

On July 30, 2014, the Indians traded Masterson to the St. Louis Cardinals for outfielder James Ramsey. To honor their former teammate, all Indians players donned Masterson’s high-sock style for the next game after his trade against the Mariners. Masterson had been on the DL due to a knee injury for nearly a month when he was traded. The Cardinals activated him from the DL on August 1. He won his Cardinals debut against the Milwaukee Brewers the next day, a 9–7 victory, in spite of allowing five runs, seven hits and three walks in six IP. While batting, he collected his first hit and run scored of the season.

A free agent after the 2014 season, Masterson agreed to a one-year deal with Boston worth $9.5 million on December 11. On August 10, 2015, Masterson was designated for assignment by Boston. He was released on August 19.

Masterson agreed to a minor league deal with the Pirates on May 12, 2016.

On March 27, 2017, Masterson signed a minor league contract with the Los Angeles Dodgers and he was assigned to the Triple-A Oklahoma City Dodgers to begin the season. He remained with them all year and was 11–6 with a 4.13 ERA in 25 starts.