Sent to Singapore with the rest of the 8th Division, Matthews served as the brigade signals officer of the 27th Brigade during the Malayan campaign and the Battle of Singapore, and at the surrender of Singapore he became a prisoner of war (POW). While in captivity he was awarded the Military Cross for displaying a high standard of courage, energy and ability while maintaining communications under fire in the earlier fighting. In July 1942, he was a member of a group of POWs sent to the Sandakan POW camp in British North Borneo. There, Matthews established an intelligence network, collecting information, weapons, medical supplies and radio parts, and made contact with organisations outside the camp, including Filipino guerrillas who assisted POWs to escape.