The award is presented annually "to the player who best exemplifies the qualities of perseverance, sportsmanship and dedication to hockey."
Alfredsson returned from off-season back surgery for his 16th NHL campaign, helping the surprising Senators make the playoffs.
"It feels really good obviously to come back and play as well as I think I could. After a frustrating year, obviously the doctors did a great job with my surgery," Alfredsson in Ottawa on Tuesday. "I feel like it's getting much better this year, I'm having more fun playing. ... It's been a great year and a great group to be a part of. A lot of fun."
Senators coach Paul MacLean said all three candidates are worthy of the honour.
"Alfie's been a real good player in this league for a long time, he gives a lot to the community and he's been through a lot as a player," MacLean said. "We're proud that he's the captain and a legitimate nominee for the Masterton. That's great."
Pacioretty, meanwhile, returned to action after missing the team's last 15 regular-season games and the playoffs last season after a gruesome injury when he was checked into a stanchion by Boston's Zdeno Chara.
"Its an honor to be nominated for the Masterton trophy.. I want to thank everyone who has supported me along the way," Pacioretty tweeted on Tuesday.
Lupul, whose career was threatened in 2010 by two back surgeries and a blood infection, enjoyed the most productive season of his eight-year NHL career.
He is vacationing in Australia and was unavailable for comment.
The trophy commemorates the late Bill Masterton, a former Minnesota North Stars who died Jan. 15, 1968.