Before you do this, please see this post if you get any error message.
How to apply custom master page and theme to all sub sites in SharePoint 2010?
1. Go to Site Actions | Site Settings
2. Click on Manage Site Features
3. Activate SharePoint Server Publishing
4. Go to Site Actions | Site Settings again and under Look and Feel click on Master Page
5. In Site Master Page click on the drop down and select your custom master page. If your not sure how to create custom master page, please see : http://virtualizesharepoint.com/category/sharepoint-2010-branding/
6. Put a check in Reset all subsites to inherit this site master page setting and click OK in the bottom of the page
Aryan Nava 
Thanks for the post! It worked for me as Site Admin – however when my co-workers login, they don’t see the changes that I’ve made…. Any ideas what I’m missing? Thanks!
You need to publish your master page
I have the same issue as T George — My coworkers do not see the custom template, but my pages are showing as published. They see the default templates. Any help is appreciated. Thanks!
Did you enable SharePoint Server Publishing Infra
http://virtualizesharepoint.com/2011/03/29/the-feature-being-activated-is-a-site-scoped-feature-which-has-a-dependency-on-a-site-collection-scoped-feature-which-has-not-been-activated/
Unfortunately, I’m still having the same problem. Haven’t figured it out yet… I did activate SharePoint Server Publishing Infrastructure. When I go to Galleries -> Master Page and Layouts, everything is greyed out so I can’t select anything to ‘publish’. perhaps this is my issue. I’m trying to figure out why it’s greyed out.
i have an article with guide step by step done a master page and page layout from html page:
http://mstechsharing.blogspot.com/2012/02/custom-master-page-and-page-layout.html
Excellent article with good steps by steps Instructions. Thanks for sharing.
How can do that in Sharepoint Foundation 2010?
In Sharepoint Foundation 2010 I have to edit the master page for every sub site to apply the settings…
it’s good article with good steps by steps Instructions. But i am not able to get the master page under the Look and feel. please can u help me how i will get..
sir ,
In step:Activate SharePoint Server Publishing
when i clicked the activate button it throws error,”The feature being activated is a Site scoped feature which has a dependency on a Site Collection scoped feature which has not been activated. Please activate the following feature before trying again: SharePoint Server Publishing Infrastructure f6924d36-2fa8-4f0b-b16d-06b7250180fa”