Masterman started his service career in the Royal Navy, attending the Britannia Naval College around 1894.

[1] After attending Torpedo Specialist Course he in 1907 worked as a Russia interpreter on HMS Vernon.

[2] During the First World War, Masterman served in the Royal Naval Air Service, commanding the Farnborough Airship Station and working in several technical posts; during this time he invented and patented the airship mooring mast with Barnes Wallis.

With the establishment of the Royal Air Force on 1 April 1918, Masterman transferred to the new service.

(By special permission of Air Cdre Warrington-Morris, Masterman was permitted to wear his RAF Air Cdre uniform and rank braid after April 1941; the Observer Corps then becoming a uniformed organisation and restyled the Royal Observer Corps under the operational control of RAF Fighter Command).