Masterson made his New York stage debut in "Call Me By My Rightful Name" in 1961 and has subsequently worked in films, theater and TV. He was one of the husbands in "The Stepford Wives" (1974), earned praise in the leading role in the stage production "The Trial of Lee Harvey Oswald" (1967) and in the TV-movie "A Question of Guilt" (CBS, 1978). In 1978, Masterson co-wrote (with Carol Hall and Larry L King) and co-directed (with Tommy Tune) the Broadway musical "The Best Little Whorehouse in Texas", which brought Masterson's wife, Carlin Glynn a Tony Award as Best Featured Actress. He and King also wrote the 1982 feature adaptation and the unsuccessful 1994 stage sequel, "The Best Little Whorehouse Goes Public" (co-directed by Masterson and Tommy Tune).
Masterson persuaded screenwriter-playwright Horton Foote to allow him to helm the feature version of Foote's "The Trip to Bountiful" (1985). This finely acted (particularly by Geraldine Page and Rebecca DeMornay) drama earned praise for Masterson in his directing debut. Minor misfires like "Full Moon in Blue Water" (1988) and "Night Game" (1989) were soon forgotten, though the stellar cast of "Blood Red" (1989) made its prominent failure smart all the more. Masterson returned to form with his assured handling of the potent "Convicts" (1991), which reteamed him with screenwriter-producer Foote. He also helmed the TV-movie version of Foote's play "Lily Dale" (Showtime, 1996) that starred the director's daughter, Mary Stuart Masterson.