MasterCraft was founded when the owners decided to start making their own. The owners took a Ski Nautique manufactured by Correct Craft and hung it from a tree and cut the back of the hull off in order to modify the hull to their preferences. The company's first ski boat was built in 1968 in a two-horse barn on a farm in Maryville, Tennessee.

During the first year of operation, MasterCraft only built 12 boats using the modified Ski Nautique hull design. MasterCraft eventually became recognized as a force in the tournament ski boat industry. The operating facility was moved to Vonore, Tennessee and now employs 591 "MasterCraftsmen." As of 2006, MasterCraft produces over 3,000 boats per year, sold in 25 different countries by over 100 domestic and international dealers, making it by far the largest producer of inboard ski, wakeboard, and luxury performance powerboats in the world.

Some of it's most popular boats today are the Prostar series of direct drive ski boats, and the X-Series Wakeboard boats, many of which share hulls with the Prostar series, but come equipped with wakeboard-specific features such as ballast tanks and a wakeboard tower. All MasterCraft Models use inboard marine engines built on the General Motors 5.7, 6.0, and 8.1 litre V8 engine blocks.