Although Carter had intended to get a degree in English at Oxford University he was advised to take a year off so he would be the same age as his contemporaries who had gone into National Service. It was through his father, Harry Carter, also a type designer, that Matthew Carter was given an internship at the Joh. Enschedé type foundry in the Netherlands. At the age of 19, Carter spent a year studying in The Netherlands where he learned from Jan van Krimpen's assistant P. H. Raedisch, who taught Carter the art of punch cutting. By 1961 Carter was able to use the skills he acquired to cut his own version of the semi-bold typeface Dante.
Carter's career in type design has witnessed the transition from physical metal type to digital type. Carter eventually returned to London where he became a freelancer as well as the typographic advisor to Crosfield Electronics, distributors of Photon phototypesetting machines. Carter designed many typefaces for Mergenthaler Linotype as well. Under Linotype, Carter created well-known typefaces including the 100-year replacement typeface for Bell Telephone Company, Bell Centennial.
An early example of his work is the logo he designed for the fortnightly British satirical magazine Private Eye in May 1962, still used today. Previously the lettering had been different for the masthead of each issue. The logo has also appeared on books, memorabilia and merchandise.
In 1981, Carter and his colleague Mike Parker created Bitstream Inc. This digital type foundry is currently one of the largest suppliers of type. He left Bitstream in 1991 to form the Carter & Cone type foundry with Cherie Cone. Carter focuses on improving many typefaces' readability. He designs specifically for Apple and Microsoft computers. Georgia and Verdana are two fonts created primarily for viewing on computer monitors. Carter has designed type for publications such as Time, The Washington Post, The New York Times, the Boston Globe, Wired, and Newsweek. He is a member of Alliance Graphique Internationale (AGI), is a senior critic for Yale's Graphic design program, has served as chairman of ATypI, is a member of the Board of Directors of the Type Directors Club, and is an ex officio member of the board of directors of the Society of Typographic Aficionados (SOTA).
Carter has won numerous awards for his significant contributions to typography and design, including an honoris causa Doctorate of Humane Letters from the Art Institute of Boston, an AIGA medal in 1995, the TDC Medal from the Type Directors Club in 1997, and the 2005 SOTA Typography Award. A retrospective of his work, "Typographically Speaking, The Art of Matthew Carter," was exhibited at the University of Maryland, Baltimore County in December 2002. In 2010, Carter was named a MacArthur Foundation Fellow, otherwise known as a "genius" grant.
In 2007, Carter designed a new variant of the typeface Georgia for use in the graphical user interface of the Bloomberg Terminal.