Dibaba, trailing for most of the race, outsprinted Masai in the last lap to win in 31 minutes, 51.39 seconds.
Fellow Ethiopian Haileyesus Melkamu was second in 31:55.50 and Masai third in 31:59.36.
Dibaba said it was especially sweet to win in Kenya, Ethiopia's traditional rival in track events.
"I am very happy to win such a competitive race, having been injured for most of last year," Dibaba said.
This year, Dibaba won the 5,000 in the New York Grand Prix and at the Diamond League meeting in Eugene, Oregon. She's the Olympic champ for the 5,000 and 10,000.
Algeria's Hadj Lazib won the men's 100 hurdles in 13.77, and Tunisia's Hamdi Dhoubi won the pole vault with a height of 4.70 meters.
Security at the championships, intensified following the July 11 twin bomb attacks in Uganda's capital Kampala that killed 76 people who were watching the World Cup final, forced thousand of fans to be locked out of the Nyayo National Stadium on Saturday.
The stadium was filled to capacity in the afternoon, said David Okeyo, the chief executive of the event's local organizing committee.
"We did not want the wall to collapse or a stampede. This stadium was meant for 35,000 people and we already had more than that," he said.
