First thing, I assume you are not trying to upload the file putting it in an update panel expecting file to upload async. Normal file Upload control needs a complete postback.
Then try putting
enctype="multipart/form-data"
on the form tag.
If that does not work, may be because of your master page implementation and how you are handling the UI, see if any of the following scenario happened:
Fixing FileUpload when Visibility is Changed Asynchronously[
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Or else, please have a look at this article to see how it can be done:
FileUpload with Master Page, Ajax Update Panel, FormView and Object Data Source[
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