Sony BMG Masterworks was formed in 2005 as a result of a merger of Sony Classical and BMG Classics, including the RCA Red Seal, Arte Nova Classics, and Deutsche Harmonia Mundi product lines. The new label's name echoed the moniker used by Sony Classical's predecessor, CBS Masterworks, previously, Columbia Masterworks, used for a Sony label, Sony Masterworks in the 1990s.
The division owned rights to recordings dating from the 20th century and late 19th century, including ones featuring Enrico Caruso, Mario Lanza, Fritz Reiner, Arturo Toscanini, Artur Rubinstein, Jascha Heifetz, E. Power Biggs, and Plácido Domingo, as well as from more recent performers such as Yo-Yo Ma, and Joshua Bell. It was also responsible for Sony BMG's immense archives of film scores (including scores for such films as Star Wars, The Phantom of the Opera, Memoirs of a Geisha and many others) and theater soundtracks, via its Masterworks Broadway imprint.
While inheriting the Masterworks Heritage and Masterworks Expanded Edition product lines from Sony Classical, Sony BMG Masterworks launched three new imprints in 2006, Masterworks Broadway, Masterworks Jazz, and Masterworks Opera.
After the acquisition of Bertelsmann's shares in the former Sony BMG in 2008, Sony Masterworks handled the Masterworks and Classical labels in the USA, and Sony Classical again became a separate division handling international Classical content, based in Berlin.