Yglesias went to high school at The Dalton School in New York City and later attended Harvard University where he studied philosophy. He graduated magna cum laude in 2003. He was editor-in-chief of The Harvard Independent, a weekly newsmagazine, and also wrote for several other campus publications.

Yglesias started blogging in early 2002, while still in college, focusing mainly on American politics and public policy issues, often approached from an abstract, philosophical perspective. He was one of the supporters of the Iraq war, although he's changed his mind since then. Yglesias joined the American Prospect as a writing fellow upon his graduation in 2003, subsequently becoming a staff writer. His posts appeared regularly on the magazine's collaborative weblog TAPPED. His personal blog has been hosted, at various times, on blogger, Typepad, Josh Marshall's TPMCafe, and at matthewyglesias.com. From June 2007 until August 2008, he was a staff writer at The Atlantic Monthly, and his blog was hosted on the magazine's website, The Atlantic. In July 2008, he announced that he would leave The Atlantic Monthly for his current home at the Center for American Progress, because he missed "the sense of collegiality that comes from working with like-minded colleagues on a shared enterprise" and thought he could "help advance their mission".

He has also written for mainstream publications such as the New York Times Magazine, and has made occasional appearances on radio and television as a political commentator. He is a regular contributor to BloggingHeads.tv. Yglesias is often referred to in the blogosphere as Big Media Matt, a semi-affectionate nickname coined by Duncan Black after his recruitment by the American Prospect.

Andrew Sullivan takes nominations on his blog for the Yglesias Award, a tongue-in-cheek honor "for writers, politicians, columnists or pundits who actually criticize their own side, make enemies among political allies, and generally risk something for the sake of saying what they believe." Yglesias is also somewhat infamous for the often bad spelling of his blog posts, a weakness he frankly admits.

Besides analytic philosophy, Yglesias has a passion for basketball and occasionally posts about the NBA, particularly the Washington Wizards. His father is screenwriter and novelist Rafael Yglesias.