After leaving her hometown of Montreal at 17 to busk across the U.S., Canada, and Montreal, she ended up in Los Angeles. In 1983 she sang backup for Glenn Shorrock's solo Australian tour and decided to stay in Australia. She became an in-demand session singer in Sydney, appearing on many commercial jingles. In 1985 she sang backup vocals on the Models' Out of Mind Out of Sight album and became a semi-permanent member of the band. She also sang on albums by Jimmy Barnes, Tim Finn, Richard Clapton, and Icehouse.

In 1987, Matthews collaborated with Kate Ceberano on the ABC-TV soundtrack for the series Stringer. You've Always Got the Blues was released the next year, reaching number four on the national charts. She then contributed to the Rockmelons and Peter Blakeley's respective debut albums. She helped form Absent Friends next, and sang on the number one hit "I Don't Wanna Be With Nobody But You" and the album Here's Looking Up Your Address.

After touring with Absent Friends, Matthews went into the studio to record her solo debut. Contributors included Absent Friends members Sean Kelly, Roger Mason, Garry Gary Beers, James Valentine, Mick King, as well as Tim Finn and Peter Blakeley. The album, Émigré, earned Matthews the Best Female Artist and Best Debut Single (for "Token Angels") at the 1990 Australian Record Industry Association (ARIA) Awards. Matthews was voted Best Female Singer in the 1990 Rolling Stone Readers' Poll.

A supporting tour followed and in October 1991 she released the live mini-album The Way It Has to Be and supported the Neville Brothers' tour. She ended 1991 by recording her second full-length album, Lily. Released in October 1992 as she supported the Simply Red tour, it went double-platinum, with sales surpassing 140,000. Matthews won Best Female Artist and Best Single (for "The Day You Went Away") at the 1992 ARIA Awards. She won Best Female Artist for the third time at the 1993 ARIAs.

Her next album, The Witness Tree, was released at the end of 1994. Matthews continued to tour locally and internationally, releasing her fifth album, Ghost, in 1997. Beautiful View arrived in 2001, followed by Café Naturale in 2004. ~ Brendan Swift