The movie star has been the butt of U.S. comedian Kimmel's jokes for a decade - and he has been bumped from imaginary appearances on the show 1,205 times, with the host often ending his programmes by claiming he had run out of time to feature Damon.
The Bourne Identity star opened the show with a fake kidnap video he had taped to promote his appearance and then took the stage with Kimmel gagged and tied to a chair behind him.
Damon said, ""Welcome to tonight's episode of Jimmy Kimmel Sucks. Just for starters, let me ask you guys this - as an audience, is it weird to see a person with actual talent host this show?""
He added, ""I've been waiting for this moment for a long, long time. This is like the time I lost my virginity, except this is going to last way longer than one second.""
Damon then replaced Kimmel's devoted sidekick Guillermo with Andy Garcia and the host's band leader Cleto Escobedo III with Sheryl Crow before introducing Robin Williams to deliver the show's opening monologue. To make the Good Will Hunting reunion complete, the actor had longtime pal Ben Affleck step in as a cue card holder.
The Argo star, who once appeared in a comedy skit on the show as Kimmel's gay lover, pretended to be upset by the takeover and he walked out on Damon, stating, ""Forget it Matt, I couldn't do it to Jimmy"".
However, there were more big stars to come - Jennifer Lopez, Sally Field, Robert De Niro and Oprah Winfrey were among the celebrities who offered up video well wishes to the Saving Private Ryan actor as he continued with the show.
Winfrey said, ""You have a gift, my friend. Not everybody can host a show.""
Damon then tried to explain why Kimmel hated him, suggesting, ""Jimmy always wanted to be an actor, and, unfortunately for him, I beat him out for every role he ever truly wanted. Jimmy has auditioned for every movie I've ever been in, every single one of them. How many did he get? None. So, he hates me.""
The stand-in host then offered up skits of Kimmel trying out for roles in Good Will Hunting, The Adjustment Bureau, We Bought a Zoo, The Bourne Ultimatum, Stuck on You and Happy Feet 2, for which the comic dressed up as a penguin.
Promising another ""gaggle of huge stars Jimmy Kimmel could never dream of,"" Damon then introduced Nicole Kidman, who has never been a guest on the show before. The actress stepped onstage, straddled the tied-up host and simulated sex with him before sitting down to chat with his replacement.
Asked why she has never guested on the show, she told Damon, ""He's (Kimmel) not classy. I mean he f**king sucks!""
During the chat, Kidman admitted she would love to work with Gary Oldman, so Damon then introduced the Brit, a regular on the show.
The Dark Knight star insisted he had no recollection of ever being interviewed by Kimmel before, and when Kidman showed Oldman a photograph of the real host, he insisted it was an ""impersonator"".
Reese Witherspoon and Demi Moore also stopped by to take part, joining the other celebrities on the crowded sofa.
Damon left the biggest surprise until last when he introduced Kimmel's ex-girlfriend Sarah Silverman, who once teamed up with the Bourne star to film a skit video called I'm F**king Matt Damon.
The movie star ended the show by thanking his guests as Kimmel sat beside him with the word 'Loser' scrawled on his forehead in red lipstick. He offered the real host a chance to close the show with a few words, but when he motioned to take off his gag, Damon got his own back by saying, ""I'm sorry, we're out of time. Good night everybody.""
The stars are all set to return to Hollywood Boulevard in Los Angeles, where the show is filmed, on Friday (25Jan13) when Kimmel unveils his star on the Hollywood Walk of Fame.