In Python, achieving masked input (displaying asterisks while typing) can be approached using various methods depending on the environment. The getpass module is typically used for password input but may not work effectively on all terminals, particularly on Windows, leading to warnings about echo control. For GUI applications, Tkinter provides a built-in option for text entry boxes that can mask input with asterisks. If working in a terminal or command line, alternatives like the msvcrt module or sys.stdin can be utilized to manually print asterisks instead of the actual input. The discussion highlights the importance of the chosen environment (terminal vs. GUI) in determining the best method for implementing this feature.