Context. The formation of massive stars (M> 10M⊙, L > 103L⊙) is still not well understood. Accumulating a large amount of mass infalling within a single entity in spite of radiation pressure is possible if, in addition to several other conditions, enough thermal energy is released. Despite numerous water line observations over a broad range of energies obtained with the Herschel Space Observatory, observations were not able to trace the emission from the hot core around the newly forming protostellar object in most of the sources. Aims. We wish to probe the physical conditions and water abundance in the inner layers of the host protostellar object NGC 7538-IRS1 using a highly excited H2O line. Water maser models predict that several THz water masers should be detectable in these objects. We therefore aim to detect the o-H2O 82,7−73,4 line in a star forming region for the first time. Model calculations have predicted this line to show maser action. Methods. We present SOFIA observations of the o-H2O 82,7−73,4 line at 1296.41106 GHz and a 616−523 22 GHz e-MERLIN map of the region (the very first 22 GHz images made after the e-MERLIN upgrade). In order to be able to constrain the nature of the emission – thermal or maser – we used near-simultaneous observations of the 22 GHz water maser performed with the Effelsberg radiotelescope and e-MERLIN. A thermal water model using the RATRAN radiative transfer code is presented based on HIFI pointed observations. Molecular water abundances are derived for the hot core.Results. The o-H2O 82,7−73,4 line is detected toward NGC 7538-IRS1 with one feature at the source velocity (–57.7 kms-1) and another one at –48.4 kms-1. We propose that the emission at the source velocity is consistent with thermal excitation and is excited in the innermost part of the IRS1a, in the closest circumstellar environment of the massive protostellar object. The other emission is very likely the first detection of a water THz maser line, pumped by shocks due to the IRS1b outflow, in a star-forming region. Assuming thermal excitation of the THz line, the water abundance in the hot core of NGC 7538-IRS1 is estimated to be 5.2 × 10-5 with respect to H2.