Masterson, who was activated from the disabled list on Tuesday and temporarily placed in the bullpen, will start Sunday's game at Tropicana Field against the Rays.
After acquiring Kelly from the Cardinals along with Allen Craig for John Lackey last July 31, the Red Sox hoped they had two building blocks. Instead, Kelly will now join Craig, who struggled mightily earlier this season, at Pawtucket.
Though Kelly's velocity has often reached the upper 90s, his command has been shaky.
"The options would have been to put him in the bullpen or to send him down to start," said Red Sox manager John Farrell. "This centers around consistent command of the baseball and his pitches. It's certainly not stuff. It's not athleticism."
In 14 starts this season, Kelly is 2-5 with a 5.67 ERA. He has just one win since April 12.
"The frustrating part of this for Joe and for all involved is when you see an athlete of his ability and it doesn't translate to the consistent command of his pitches," Farrell said. "That's what's continually being addressed. [With] the uncertainty of his pitching schedule coming out of the bullpen, he's best served to achieve this through consistent work in between starts and starting at Pawtucket."
There was some speculation that Kelly's rotation spot could go to Triple-A lefty Brian Johnson, Boston's No. 6 prospect, but Johnson wouldn't have enough rest to pitch on Sunday.
"He's been throwing the ball well all year," Farrell said of Johnson. "If we were going to make a move coming into Joe's start, it was going to be with Justin first, and we'll see where we go from there. But Brian is doing a heck of a job. He's been consistent at Pawtucket. When that opportunity presents itself remains to be seen, but with each passing start, he's getting closer."