The 21-year-old clocked 58.10 seconds, breaking Gemma Spofforth's previous mark of 58.12sec from the 2009 championships in the era of the now-banned neoprene suits.
"I didn't realise I had broken the record until the finish, I'm so happy," said a stunned Masse.
"It's hard to put this into words, it means the world to me."
Kathleen Baker of the United States took silver, at 0.48sec back, while Emily Seebohm of Australia brushed off a cold to claim bronze, 0.49 behind.
"I didn't come in saying 'I'm going to defend my title', but to rather enjoy racing these girls, they're fantastic, there's great depth in the backstroke.
"If I hadn't got a cold last week, I could have been a bit stronger on that last leg, but I'm proud to be back on the podium after Rio," she added having finished seventh in the 2016 Olympic final.
"I did a big job to turn it around from the hole that I was in, it's my best time since 2015.
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