Matusow suffered from bullying when going through school and did not attend college. He attempted to get work as an auto mechanic, but did not complete studying this. He later worked at his family's furniture store.

Matusow's first experience of poker was playing video poker in the Maxim Casino at the age of 18. His first night's winnings were $85. He went on to play video poker regularly, to the extent he suffered from repetitive strain injury in his shoulders and arms. On occasions he had to steal money from his mother's purse and at one stage attended Gamblers Anonymous meetings.

Matusow was taught Texas hold 'em in 1989 by a rounder named Steve Samaroff. Early in his career he won 81 out of 82 sessions and won $250,000. He also worked as a poker dealer.

At the 1998 World Series of Poker, Matusow paid one third of Scotty Nguyen's entrance fee into a satellite event for the $10,000 no limit Texas hold 'em main event. Nguyen went on to win, and gave $333,333 to Matusow in return for his partial stake.

Matusow got his nickname of "The Mouth" because he loves to talk at the table. Some consider him one of the true entertainers in the game. Others consider him one of the most annoying players in the game. He is known in the poker world for his habit of making spectacular misjudgements (known as "Mike Matusow Blow-ups" or "Mike Matusow Meltdowns") when on the verge of victory.

Matusow has had some successful showings in tournament poker, primarily in no limit Texas Hold 'em and Omaha Hi-Lo events.

In 1999, he picked up his first World Series of Poker (WSOP) bracelet, by winning the $3,500 No-Limit Hold 'em Event.

In 2001, he made the final table at the WSOP $10,000 no limit Hold 'em main event, before being eliminated in 6th place. Matusow claims that the decisive hand was when he had A¢¾ 2¢¾ and was raised all-in by eventual champion Juan Carlos Mortensen. Matusow claims he knew Mortensen was bluffing but was unable to call the bet, folded, and was infuriated when Mortensen eventually showed Q8 offsuit. This went on to aggrevate Matusow for the next six months.

His second WSOP bracelet came in 2002 when he beat Daniel Negreanu heads-up in the $5,000 Omaha High Low event.

At the 2004 WSOP main event, Matusow was a focal point of ESPN's coverage of the main event, as he verbally attacked eventual champion Greg Raymer before being eliminated and openly crying.

In the 2005 WSOP, Matusow finished 9th out of 5,619 players in the main event for $1,000,000. He was eliminated by Steve Dannenmann when his pocket 10's did not stand up against two overcards and an inside straight draw.

He had another strong performance on November 8, winning the WSOP Tournament of Champions in a heads-up battle against Hoyt Corkins and earning another $1,000,000 in the process, along with a trophy. He made the final table of the Tournament of Champions the following year also, this time finishing third.