After time spent with a couple of local bands (the Classics and the Rebels) in his hometown of Scunthorpe, he moved to London where he began his recording career in 1966 with the surf group Pyramid. The band recorded one single for Deram Records, but never really went any further and Matthews (then still known as Ian MacDonald) left after he was brought to the attention of Ashley Hutchings, who happened to be looking for a male singer for his new band Fairport Convention. He remained with Fairport for two albums, including the folk-rock classic What We Did on Our Holidays, before leaving during the recording of 1969's Unhalfbricking (his backing vocal can be heard on "Percy's Song") due to creative differences. By the time of his second and last record with the band, he became known as Ian Matthews, changing his name to avoid confusion with King Crimson's Ian MacDonald. Matthews soon signed with MCA Records for his first solo effort, Matthews Southern Comfort (1970), which featured former Fairport bandmates Richard Thompson and Simon Nicol. He eventually formed a band of the same name, recording two albums for MCA and scoring a number one U.K. hit with their version of Joni Mitchell's "Woodstock." In November of 1970, at the height of the band's popularity, Matthews left, abruptly walking off-stage during a show in Oxford. Shortly thereafter, a deal with Mercury Records subsidiary Vertigo resulted in two of his best albums, If You Saw Thro' My Eyes (January 1971) and Tigers Will Survive (November 1971).

Artistically restless, Matthews formed another band, Plainsong, with Dave Richards, Andy Roberts, and Bob Ronga. Both Roberts and Ronga had appeared on Tigers Will Survive. A contractual obligation with Vertigo for one more record led to the recording of Journeys From Gospel Oak. The finished product, which was completed in just five days, remained in the can until 1974, after being sold to Mooncrest Records. Free from his contract with Vertigo, Matthews and his new band recorded the loosely conceptual In Search of Amelia Earhart in 1972 for Elektra Records, before disbanding when the label refused to release the follow-up.

Matthews then relocated to California, recording two more albums for Elektra, the Michael Nesmith-produced Valley Hi (November 1973) and Some Days You Eat the Bear and Some Days the Bear Eats You (July 1974). While both received their fair share of critical praise, neither did all that well commercially, and he was dropped from the label. Following a brief stint with Columbia, which yielded what may be his two weakest records (Go for Broke [1975] and Hit and Run [1976]), he reunited with Sandy Roberton, who had produced both Journeys From Gospel Oak and In Search of Amelia Earhart, for his next venture, 1978's Stealin' Home. Produced by Roberton on his own Rockburgh label, Stealin' Home surprisingly spawned Matthews' biggest U.S. hit, the Terence Boylan penned "Shake It" (number 13). Subsequent LPs failed to match the success of Stealin' Home and when Rockburgh went bankrupt, he was once again without a label.

From the mid-'70s on into the '80s, Matthews dabbled in a number of different styles, from jazz-inflected pop to new wave, with varied results. Living in Seattle (he moved there in the late '70s), led to the formation of yet another band, Hi-Fi, who released two records to relative public indifference before splitting up. Once again solo, Matthews returned with the techno-pop Shook (1984), which was released only in Germany following PolyGram's decision to not market the album in Britain or the U.S. Frustrated by the decision, Matthews decided to call it quits after 18 years as a recording artist. This consequently led to work as an A&R man for Island Music and then Windham Hill Records, but a 1986 appearance at Fairport Convention's annual reunion festival rekindled Matthews' interest in performing. His retirement turned into merely a five-year hiatus, culminating with Walking a Changing Line (1988), an album dedicated solely to the songs of singer/songwriter Jules Shear.

The late '80s saw another move for Matthews, this time to Austin, TX, where he worked on and off with Walking a Changing Line co-producer Mark Hallman. The next decade would be Matthews' most productive stretch since the late '60s/early '70s, with the release of five solo studio albums, as well as three with the reformed Plainsong, one with the band Hamilton Pool, and a handful of live recordings. It also proved to be his most fruitful period as a writer. The '90s also saw the release of various collections of odds and ends, including three volumes of rarities and unreleased material entitled Orphans and Outcasts.

As the '90s came to an end, Matthews continued to stay busy, floating from project to project, recording on his own, as well as with others. Tiniest Wham was issued in early 2000, as was the Sandy Denny tribute Secrets All Told with the one-off band No Grey Faith. A collaboration with singer/songwriter Elliott Murphy (La Terre Commune) followed in 2001.