Masthikatte came into existence in the 1980s when the Karnataka Power Corporation built a township for its employees working on the Varahi Hydroelectric Project.

The town has a number of amenities, including a post office, bank, and medical facilities which were all provided by the Karnataka Power Corporation.

Masthikatte is well connected to the towns of Shimoga, Hosanagara, Thirthahalli, Kundapura, Udupi and Mangalore on the State Highway.

As the village is located in the midst of dense forests belonging to Western Ghats, a World Heritage Site, variety of flora and fauna occur around Masthikatte.

[citation needed] Backwaters of the Varahi River dam exist in the low-lying areas some 3 kilometers away, near the village of Hulikal The Kunchikal Falls in the Western Ghats area, created by Varahi River, are located 5 Kilometers away from Masthikatte.