mcmaster was born in brooklyn, new york. his father, a native of new york, was a banker and planter at new orleans at the beginning of the civil war. he graduated from the college of the city of new york in 1872, worked as a civil engineer in 1873–1877, was instructor in civil engineering at princeton university in 1877–1883, and in 1883 became professor of american history in the university of pennsylvania. mcmaster was elected a member of the american antiquarian society in 1884.