They both have a wide range of meanings. "It's fine" is normally a way to say that something is good and acceptable the way it is. "It doesn't matter" means that the question is irrelevant. "Is this raincoat good enough?" It's fine (it will do the job) or "It doesn't matter (It stopped raining so your question isn't relevant) There are secondary uses of these terms, which are best avoided as they seem insincere. They are used as a rather insincere way of telling someone that you are not upset about something. In this case they are used identically to mean "I'm not upset about it (even though it isn't fine lol) "I am sorry I bruised your arm" "It's fine/It doesn't matter." - Whichever phrase you use is insincere in that the arm was bruised and does matter: it is just an attempt to pretend there is no problem when you want to avoid an argument. THis usage is common, but it does have an overtone of insincerity

Hi Law, When someone apologises to us, we can indicate our acceptance of that apology with "it's fine". When we feel that the outcome of something is acceptable to us, we can say "That's fine. Don't worry about it." Example: They delivered my furniture with a few scratches, but I think it's fine." It's a way of telling others that everything is alright and you are not bothered with something. When we are not bothered with either way something turns out, we say "It doesn't matter." The outcome does not affect us or is irrelevant. Example: We are not sure which one of our children vandalised the wall. It doesn't matter, all of them will repaint the wall. You would not write: "We are not sure which one of our children vandalised the wall. It's fine! Hope this helps. Lance

There are decent answers from other people here on the basic approach to these phrases. So, I won't repeat what the others have said. But, I think you also need to look at how we use fine and what it REALLY means. Native English speakers (British) often use "It's fine" when it probably isn't but we don't want to show we are angry. So 'fine' is a more complex word than you might think.