In keeping with his policy, Matthew introduces John with a fulfillment passage, but this one is not one of the formulaic passage.  In this case, Matthew (as does Mark and Luke when they cite the Old Testament) quotes from the Septuagint.  Notice the slight difference in punctuation between the translation form the Hebrew which one encounters in Isa 40:3, and the translation from the Septuagint.

It is interesting that the Qumran Community when using this passage in regard to their ministry adopted the Hebrew punctuation, "The voice of one crying:  In the wilderness..."  Matthew wishing to stress that John's ministry took place in the wilderness, not in Jerusalem, was comfortable with the Septuagint, which suited his purpose.  It was in the wilderness that John was preparing for the ministry of the Messiah, for the Messiah's ministry would begin not in Jerusalem, but outside of that influence.  In fact, in Mat 23,24 Matthew will stress that Messianic ministry and expectation was not attached to Jerusalem and the Temple, for the temple was to be destroyed.  At both the beginning of his Gospel and at the end, Matthew distances the Messianic ministry from Jerusalem and the temple.

We will return to the opening words of John's preaching shortly, but first we should notice that when the Pharisees and Sadducees come put for baptism, John severely warns them to repent for judgment (an axe) is ready to take place over them.  Again, Matthew is distancing Jesus and his ministry from Jerusalem, the Temple, and the Jewish powers.  They are to be judged by God for their rejection of the  Messiah.

John likewise distances himself and his ministry from that of the Messiah.  He baptizes in (or with) water based on repentance, but Jesus' ministry and baptism will come in the fullness and power of the Holy Spirit.  

In Mat 3:6 John preaches a baptism related to the confession of sins.  In 3:8 and 3:11 we notice that repentance is associated with John's baptism.  In 3:1 he began his preaching with "Repent...".  Mark puts it simply, "John the baptizer appeared in the wilderness, preaching a baptism of repentance for the forgiveness of sins." (Mk 1:4).  From this we learn that John's baptism was based on repentance and was associated with the forgiveness of sins.

But what is the difference between this baptism of John and the Christian baptism shortly to be proclaimed by Jesus?  Both John's and Christian baptism are based on repentance and are for the forgiveness of sins.  Some having been baptized by John's baptism needed to be re-baptized (Acts 19:1-5).  It is obvious that although John's baptism was for the forgiveness of sins, it was a transitory baptism, shortly to be replaced by a baptism that Jesus commanded Matt 28:19, 20, Mk 15:16).  Both John's and Christian baptism were based on faith in God and repentance of sins, and were for the forgiveness of sins.  

The difference was the sacrificial system upon which they built.  John's was under the yearly sacrificial system of animal sacrifices, Christian baptism was and is under the permanent, once for all time, sacrifice of Jesus.  John's baptism was temporary under a temporary sacrificial system to last only until the permanent sacrifice of Jesus.

Jesus commanded his disciples (apostles) to go and make disciples of all nations (Mat 28:19, 20, Mk 16:15,16).  John's baptism was only for the Jews.

We return now to John the Baptist's preaching (Mat 3:2).
"Repent, for the kingdom of heaven is at hand"
This short statement is loaded with significant theological concepts!
Each word carries with it loaded meanings!
Note that it is exactly the same message Jesus came preaching (Mat 4:17), "Repent, for the kingdom of heaven is at hand."
Each of these terms has significant eschatological implications.  (click on eschatology and eschatological language).
By this we mean that they have final, end of the world implications!
The Christian (and NT) world view is that Jesus initiated the "last days", and that we now live in these last days.  These are the days 
for salvation.  The next "days" or "age" is eternity.  These are the days in which we must be saved.
Notice these scriptures:

From the New Testament perspective, we are living in the last days.  This brings a sense of urgency to what we do and how we live.  In the early years of the 20th century, several German theologians suggested that eschatology should be removed from time ( a timeless eschatology) and interpreted simply as those matters that carried with them a sense of urgency and significance.  They were wrong in removing eschatology from time or history, but correct in identifying eschatological matters with a sense of urgency.

If Jesus was ushering in the last days, if the Christian age is the last days (both of which we endorse) then there is a sense of urgency in John's and Jesus' preaching.  What they preached had end time significance!

Mark 1:15 records Jesus' preaching "The time is fulfilled, and the kingdom of heaven is at hand; repent and believe the gospel."

Recognizing that the time was fulfilled and that Jesus was about to usher in the last days, John seized the sense of urgency and preached "Repent..."  The time for delay was past.  The time for repentance was here!  God was about to restore his kingdom through his Messiah, Jesus.  There was sense of urgency in the air.  When the Pharisees and Sadducees came out for baptism not manifesting repentance, John got all over them, calling them a "brood of vipers"!

Repentance, therefore, is an eschatological term of significance and urgency.  The time of the last days was at hand.

The reason for repentance was that the kingdom of heaven was at hand!  This is a Matthean term.  In the similar passages in Mark and Luke they refer to this as the kingdom of God.  Two matters of interest are presented here, 1) the term kingdom, 2) the term heaven.

1) The word kingdom in Greek is basileia (basileia).  The root meaning of basileia is to reign.  When the Bible speaks of the kingdom of God it has reference to the reign of God.  Kingdom speaks of what God is doing.  the reign from heaven, the reign of God, to take place through his Messianic king, was about to break into human experience in a unique and powerful manner.  Without question, repentance was necessary before God through Jesus could reign in people's hearts and lives.  

Kingdom of heaven: Matthew does not normally use the expression kingdom of God (except in 4 instances in Mat 12:28; 19:24; 21:41; 43) for it would be inappropriate for a Jew to speak or write God's name.  Under normal circumstances the Jew would substitute something similar in the place of the word God, hence Matthew uses the expression kingdom of heaven rather than kingdom of God. (Matthew uses kingdom of heaven 32 times in 31 verses, kingdom of God 4 times in 4 verses.  Kingdom of God is found 52 times in the Gospels, but only 4 times in Matthew.  Kingdom of heaven is not found at all in the remaining Gospels, including John.  [These are RSV translation counts]).

Because the kingdom of God is at hand (Mark 1:14 "The time is fulfilled, and the kingdom of God is at hand; repent, and believe in the gospel.") John preaches that the Jews should repent.  the urgency for the need to repent is that God's reign is about to break in on them in the person of Jesus, the Messiah.  But what exactly does "at hand" mean?

PAY CAREFUL ATTENTION

Here in this expression we are introduced to a fascinating Jewish idiom.  Literally the term can mean "close" or "near", but we learn that in certain contexts terms take on heightened importance and meanings. In eschatological contexts words often take on special significance and are enhanced by the context.  In this case, since eschatology often signifies significant time, "at hand" means more than simply "close" or "near".  It takes on the sense of "already here" or "so certain that it can be spoken of as here".  In eschatological discussions we speak of Inaugurated Eschatology in the sense that the end has already begun, or is already breaking in.  We have already noted that Heb 1:2 and Luke in Act 2:17 speak of the last days as having already arrived.  With the coming of Jesus, the Messiah, the messianic kingdom of God could be spoken of as breaking into human experience.  This is what John means when he proclaims that the kingdom of heaven is at hand.  He means that the kingdom of heaven/God is so certain that since Jesus is now here, it (the kingdom) is already breaking in.  There is a sense of urgency here.  God's reign is so certain, and in the person of Jesus is already breaking in, that the Jews needed to repent immediately.  Jesus will say in Mat 12:28  "... if it is by the Spirit of God that I cast out demons, then the kingdom of God has come upon you...," indicating that the kingdom in his person was already here!

We can understand the urgency of John's preaching in that he recognized, as did Jesus, that the time for the kingdom was fulfilled (Mk 1:14), that the king was drawing near, and that the kingdom was so certain that the Jews needed to repent and get their lives sorted out in order to be ready for the king and the kingdom.

The idiomatic expression "the axe is laid to the root" was a Hebraism (Hebrew idiom) for judgment.  Judgment was already beginning and breaking in on Israel and the world in the coming of the Messiah, who we read in Acts 17:30, 31 will judge the whole world in righteousness.  Notice in Acts 17:30,31, the call to repentance.

John's and Jesus' baptism:
John baptizes with water (can be translated "in water" or "with water") for repentance, that is to demonstrate repentance. 
Jesus was to baptize them " with the Holy Spirit" (can be translated "in the Holy Spirit") and fire. 
But Jesus baptism was to be "with the Holy Spirit and fire."
Some have suggested that the Holy Spirit aspect of Jesus' baptism was the life giving power of salvation and the fire would refer to the judgment Jesus would also bring.  This is possible since fire is associated with judgment, and the next sentence introduces fire and judgment.
However, fire is also associated in the Jewish tradition with the cleansing or purifying power of God.  So in this case, seeing that Holy Spirit and fire are joined by the coordinating conjunction kai (kai - and, indeed, also) we possibly should understand this fire as the purifying work of God through Jesus in salvation.
There is no question that in the next verse the unquenchable fire is a reference to the final judgment (Isa 34:8-10, 66:24; Jer 7:20; 2 Pet 3:10-12).