World number two Woods was exceptional from tee-to-green en route to a five-under-par 66 and a share of seventh place after picking up five shots on the back nine at the US Tour-organised 48-man, no cut event in Kuala Lumpur.
However, other than a 20-foot putt on the 10th for birdie, the American was left frustrated as time and again, putts shaved the hole or lipped out.
"Turning at even par I felt like I was getting run over there and I felt like I had to shoot something at least three or four-under on the back nine and I happened to get one more," Woods told reporters as sweat dripped from him on a humid day in the Malaysian capital.
"What was frustrating was turning in even par and I'm eight back. It is going to take something 20 plus (under) to win the tournament so you got to be aggressive and we got to go get it," added Woods, who birdied three of his last four holes.
Matteson, twice winner of the US Tour's Fry's Open, went one better than Woods and birdied the last four holes, including holing his bunker shot on the last, for a sparkling bogey-free eight-under round and a one-shot lead.
"I knew I'd be doing good if I could leave myself seven or eight feet for par and it bounced and slam dunked in the hole," the world number 156 told reporters of his 63rd shot of the day.
While Matteson went about his business on the relatively short Mines Golf Course with little fanfare, a crowd of more than 500 flocked to watch Woods on his return to Malaysia for the first time in 13 years.
Many more are expected for the second round of the Asian and Malaysia Tour co-sanctioned event with Friday being a public holiday.
Last to tee-off with Australian Marcus Fraser, Woods thrilled the galleries with a number of fizzing tee-shots but despite the 34 degrees Celsius temperatures, the American's putter was stone cold as he reached the turn in even par.
His round ignited with the lengthy birdie putt on the 10th and another tap in for birdie on the par-five 11th after he found the green in two.
The 36-year-old moved to three-under with his fifth birdie of the day at the 290-metre 15th when he drove into a greenside bunker off the tee and managed to hole a straight five-footer.
Another sharp iron approach to the par-three 16th left a similarly shot putt for birdie which Woods holed before an up-and down at the par-five 17th made it three birdies in a row.
"I missed a couple out there... realistically it could have been seven or eight, but even at the turn and to get to five, it was a nice little comeback," Woods said.
India's Gaganjeet Bhullar led the way for the 10 Asian Tour players in the field after shooting a 65, with Danny Chia leading the Malaysian charge by matching Woods's 66.
"You never know this week, it could be an Asian Tour player's week," the Indian, ranked fifth on the region's order of merit, said.
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