This article is from the Final-Fantasy and other Square Soft Games FAQ, by firstname.lastname@example.org (Nick Zitzmann) with numerous contributions by others.
You first need to go to 600 AD and head to the Denadoro Mountains. On
top of the mountain somewhere is the Masamune, but you must first beat
Masa & Mune twice before you can get it. (Hint: If you encounter any
Ogans on your climb, use Lucca's Flame Toss tech to turn them into
When you beat Masa & Mune the second time, you'll get the Broken Sword.
(Apparently, the Masamune has been broken all this time.)
Take the Broken Sword to Frog in the Cursed Woods. He'll move out of the
way so you can open the pot behind him. Inside is the Broken Hilt.
Take both to Melchior in 1000 AD. He'll tell you that you need some rare
Red Rock to finish forging the Masamune, but it can only be found in
Now, here's the long one... Head back to 65,000,000 BC via the End of
Time. Visit Ayla at the Ioka Village, and beat her in a soup-drinking
contest to win the rock.
On the morrow, you'll have the Rock, but you'll lose the Time Key. To
get it back, you must go into the Forest Maze. After you get through the
Forest Maze, go into the Reptite Lair and defeat Nizbel to get the Time
Finally, head back to 1000 AD and forge the Masamune at Melchior's.
(You first need to find the Magic Cave in 600 AD before Frog will equip
the sword, though. It's just to the east of the Denadoro Mountains.)