The Master Race was created when the Saxon Master stepped into the Immortality Gate and transferred his genetic template to 6,727,949,338 human inhabitants of the planet Earth on Christmas Day 2009, excluding two humans that were protected against the transformation.
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Biology
As the Master Race, every human on Earth was rendered identical in every way to the Saxon Master with no apparent sex or age differences. (TV: The End of Time) However, the Master himself did refer to the "female Masters" in his Masterplan Journal. (PROSE: The Secret Diary of the Master) Wilfred Mott wondered if dead bodies were affected; the Tenth Doctor's reaction suggested they were.
The Master Race appeared to have the Master's feral hunger due to the latter's unstable form, as they indicated to Donna Noble that they were planning to devour her, and shared not only his appearance but also his memories and personalities.
Although visually indistinguishable from the Master, the human-born members of the Master Race were still considered inferior "mongrels" by the Master, who claimed that Masters made from Time Lords would be far superior. (TV: The End of Time)
History
When the Saxon Master stepped into the Immortality Gate, an alien artefact reverse-engineered by billionaire Joshua Naismith, it sent out his genetic structure to nearly every human on Earth, turning everyone into exact copies of him. Two humans escaped this transformation: Donna Noble, who appeared to have been protected by the influence of her DoctorDonna transformation; and Wilfred Mott, who was protected by special radiation shielding at the time.
With all humans, including US President Barack Obama and the leaders of UNIT, now essentially the same man, the Master ordered his self-proclaimed Master Race to take control of the planet with the original Master as their undisputed leader. He planned to convert the planet into a warship. After the Tenth Doctor's escape, the planet's military resources were dedicated to searching for him.
Once the human race had all become the Master, they all heard the incessant drumming that had driven him mad over the years. Soon after, the Master realised he could use the combined mental power of the Master Race to send a signal of the drumming through time and space and help the Time Lords return to the universe, with the ultimate purpose of using the Immortality Gate to turn them into more of the Master Race, as the Master believed the results would be superior to the human-born specimens. They made contact, and a White-Point Star diamond was sent to Earth. The Master Race recovered it and used it as a power source to pull Gallifrey out of the Time War to manifest near Earth, threatening the planet with destruction. Lord President Rassilon and other Time Lords appeared near the Immortality Gate.
However, the Doctor warned the Time Lords that the Master had more nefarious plans, at which point the renegade interrupted him for the honour of explaining his plans himself. As soon as he announced his intentions of turning the Time Lords into the new Master Race, however, Rassilon reversed the Master's transfer of genetic code with a wave of his hand, and the human race returned to their original form. (TV: The End of Time)
Legacy
The Eleventh Doctor later told his companion Clara Oswald about the Master Race, revealing to her that she, being a human, was of course part of it. (PROSE: The Day of the Doctor)