During Helloween's tour of their album The Dark Ride in 2001, members Roland Grapow and Uli Kusch (who had been in the band since 1989 and 1994, respectively) decided to form a side project. As the other Helloween members felt the two were more focused on their side project than Helloween at the time, both were later fired from the band. The name "Masterplan" was born out of the idea that they would be master musicians with the future in their hands, starting the newest power metal band of the new millennium. To fill out their line-up, Roland subsequently invited Children of Bodom keyboardist Janne Wirman. For vocals, Russell Allen was invited but he had to decline, being busy with his main band Symphony X. A second invitation was made for former Helloween singer Michael Kiske, who also rejected the proposal, claiming that he wanted to keep away from the metal scene. After being impressed with the vocals on the Norwegian band Ark's album Burn The Sun and a solo album titled Worldchanger, singer Jørn Lande was invited. Jørn accepted the invitation, completing the band roughly six months after the beginning of the project.

Their first full-length self-titled album Masterplan was released in 2003, produced by Andy Sneap. The band then consisted of Grapow and Kusch with Jørn Lande. The main part of the keyboard lines on the album were arranged and programmed by Roland and Uli. Keyboardist Janne "Warman" Wirman recorded some sessions for the album, but could not stay on as a full-time member due to his commitments to Children of Bodom. Axel Mackenrott replaced him on tour and soon after as a permanent member. Studio bassist Jürgen Attig (Casanova) helped with some bass lines on the recordings, but Grapow was the main bassist for the album. For tour and subsequent recordings, Jan-Sören Eckert was hired as a permanent member.