Holshouser was born in Boone, North Carolina in 1934 and was the son of James E. "Peck" Holshouser, who was United States Attorney in the middle district of North Carolina under President Dwight Eisenhower.
In 1962, two years after graduating from the University of North Carolina School of Law, Holshouser was elected to the first of several terms representing Watauga County in the North Carolina House of Representatives, eventually becoming minority leader. North Carolina had been virtually a one-party, Democratic-dominated state since disfranchisement of blacks in 1899; Holshouser came from one of the few areas of the state where the GOP even existed. During the 1960s and 1970s, however, a number of Southern whites began shifting their support to the Republicans.
He chaired the state Republican Party from 1966 through 1972, following passage of federal civil rights legislation in 1964 and 1965 that ended segregation and authorized federal oversight and enforcement of suffrage for African Americans.
In 1972, Holshouser defeated Jim Gardner for the Republican nomination for Governor, and then narrowly defeated Democrat Skipper Bowles in the general election with 51 percent of the vote, becoming North Carolina's first Republican governor elected since 1896. He was likely the beneficiary of coattails from Richard Nixon, who carried North Carolina and 48 other states in the Presidential election on the same ticket. At age 38, Holshouser was also the state's youngest governor since the nineteenth century.
Holshouser was a moderate Republican, which caused some chagrin among many members of his own party. The governor supported Gerald Ford for president in 1976, while Republican U.S. Senator Jesse Helms (a former Democrat) supported Ronald Reagan. When Reagan won the North Carolina presidential preference primary of 1976, the Republican state convention refused to appoint Holshouser as a delegate to the Republican National Convention.
His accomplishments in office included consolidation of the University of North Carolina system under a Board of Governors, capital improvement funding for the community college system, statewide enrollment for children in kindergarten, and establishment of health clinics in rural areas not served by local physicians. He could not run for reelection in 1976. North Carolina governors were barred from immediate reelection at the time; while the state constitution had been amended to allow governors to run for reelection, this was not slated to take effect until 1976.
After leaving office, Holshouser returned to the practice of law (at one point forming a firm with former Democratic Gov. Terry Sanford), was elected to the Board of Governors of the University of North Carolina, and later served as a member emeritus. He also served on the Boards of St. Andrews Presbyterian College in Laurinburg, NC, and his undergraduate alma mater, Davidson College.
Holshouser eventually became great friends with Democratic Lieutenant Governor Jim Hunt, who succeeded him in 1976. They served together on the North Carolina Advisory Board of DonorsChoose. Late in life, Holshouser campaigned alongside Hunt for state-funded judicial elections.
He died on the morning of June 17, 2013.Holshouser Hall, a residence hall at the University of North Carolina at Charlotte, is named in his honor.
A stretch of US 321 between Boone and Blowing Rock is named for him.
Professorships were endowed in his honor at both Appalachian State University and the University of North Carolina at Chapel Hill.
Holshouser was honored with the North Carolina Award in 2006; it is the state's highest civilian honor.