Masterful and masterly both mean showing outstanding skill, as in a masterful performance or a masterly performance, and both can also describe someone domineering or fond of giving orders. There is no clean line of meaning between them; the choice is mostly a matter of which word fits the sentence, as masterly is typically used right before a noun.
The core difference
Masterful and masterly share both senses, skilful and domineering, so the difference between them is one of use rather than meaning.
- Masterful — showing outstanding skill, as if done by an expert: the pianist gave a masterful performance of the concerto.
- Masterful — also domineering, used to giving orders: his masterful tone left no room for argument.
- Masterly — executed in the manner of a master, showing competence and skill, and, like masterful, sometimes arbitrary or domineering: her masterly grasp of the subject impressed the examiners.
How to tell them apart
Because both words trace back to the same root, master, it is no surprise they ended up carrying the same two meanings: skilful, and bossy or arbitrary. Neither word owns the skill sense outright, and neither word owns the domineering sense outright, so leaning on meaning alone will not settle which one to pick.
A quick memory hook: masterly ends like friendly or orderly, adjectives built to sit directly before a noun, which is exactly how masterly is most often used, as in a masterly performance. Masterful ends like powerful or forceful and works comfortably both before a noun and after a verb, as in the performance was masterful.