Fabio Aru (Astana) found himself caught out in the battle for positions in the finish and surrendered yellow to Chris Froome (Team Sky).
A lumpy finish to the stage had seen a few late attacks go clear, but they were all dragged back as there was a sprint for positioning going into the foot of the kick up to the finish.
The pace was hard right from the bottom of the nasty little climb to the line, Matthews stayed patient until 200 metres to go, where he launched around Greg van Avermaet (BMC) and Phillipe Gilbert (Quick-Step Floors) to take out a memorable stage win against superb opposition.
After the stage, Matthews reminisced on the tribulations that had plagued him coming into the same finish two years ago.
"Last time we finished at this finish two years ago I had four broken ribs and skin all off my body," said Matthews. "It was one of the stages I was really targetting before I crashed and now to come back on the same finish, to win it like that... it's really a dream come true."
After a tough day in the saddle over the 181.5km stage, 'Bling' was happy to have been able to repay his teammates efforts with a win.
"When we kept the breakaway so close, I knew that I wouldn't have many teammates in the finale because we had to ride quite hard to bring de Gendt back. We rode all day and we were still able to have two or three guys with me there in the final. It was the perfect day."
Race leader Aru got lost with his positioning coming into the frantic finish and lost a surprising 25 seconds to Chris Froome as he had to dodge riders and scramble as fast as possible from the back of the peloton. Froome re-assumed yellow and now holds a 19 second lead over Aru.
Froome was surprised and clearly delighted after the events of the frenetic finish.
"Without the job the team did today, I wouldn't have found myself in that position," said Froome. "Especially Kwiato (Michael Kwiatkowski) just did an amazing job to keep me there in the final kilometre. Then in the last 500 metres he was just shouting in the radio saying, 'Go, go, go, you've got a gap. It's splitting to bits back here, just push'. It was amazing to hear that."
"It's still so close between the major rivals, every second is worth really fighting for."
[tdf widget="tourleaders" stage="14"]
As it happened
Reto Hollenstein (Katusha-Alpecin), Thomas de Gendt (Lotto Soudal), Maxime Bouet (Fortuneo-Oscaro), Timo Roosen (Lotto NL-Jumbo) and Thomas Voeckler (Direct Energie) were the riders who formed the early breakaway. They were on a hiding to nothing from early on, with the teams of BMC, Sunweb and Bahrain-Merida doing the work for their leaders and keeping the break close.
They got up to a maximum advantage of three minutes, but never really looked like being allowed to go all the way to the finish.
The intermediate sprint was a familiar affair, with Marcel Kittel (Quickstep Floors) and Michael Matthews contesting the sprint but not wasting too much energy, this time Kittel took out one more point than the Australian.
The controlling pace of the peloton stifled the race on the flat roads of the first half of the race, with the lumpier second half of the stage a bit more susceptible to attacks.
The Cote de Contres, summiting with 36km left, was the toughest of the climbs and saw a number of riders dropped from both the break and the peloton. De Gendt and Voeckler were the only two from the early move left off the front and after the French star refused to cooperate with de Gendt, the Belgian accelerated away and was left by himself at the front of the race.
The peloton dragged back de Gendt inexorably, catching him with 12km remaining. Attacks then flowed from the main bunch, with Tony Martin (Katusha-Alpecin) trying to clip his way off the front of the race. He was brought back quickly, but Maurits Lammertink (Katusha-Alpecin), Damiano Caruso (BMC), Pierre-Luc Perichon (Fortuneo-Oscaro) and Nikias Arndt (Sunweb) then counter-attacked and quickly gained a modest gap.
Perichon and Lammertink quickly got frustrated with the BMC and Sunweb riders, who were there purely to mark the moves and protect their leaders' chances for the win. Lammertink tried to attack again, but his lead was short-lived as the peloton navigated some very technical roads on the run-in to the finish.
Yellow jersey-wearer Aru seemed lost in the finale, well out of position near the rear of the peloton rather than the front with the majority of other favourites.
The leadouts wound up the speed into the foot of the final climb, until Oliver Naesen (AG2R) shot off the front and up his way onto the climb, trying to attack right from the bottom.
Gilbert covered the move, with Matthews and van Avermaet also close to the front. Naesen tired quickly, Gilbert took over and it wasn't long before Matthews unleashed a ferocious acceleration to win the stage.
Behind him, van Avermaet struggled manfully to finish second, with Edvald Boasson Hagen (Dimension Data) rounding out the top three. Australian Jay McCarthy (Bora-Hansgrohe) also produced a superb ride to finish fifth on the stage, given free reign to pursue a result on a stage that would have suited his team leader Peter Sagan.
[tdf widget="stagewinners" stage="14"]
