The element was discovered in erbia by J. L. Soret and M. Delafontaine in 1878 by means of its spectrum. Soret named the new element X. By 1879, P. T., Cleve had independently shown that Marignac's erbia was a mixture of at least three oxides, those of erbium, holmium and thulium. He named one fraction holmia after his native city, Stockholm. This faction was later found to have the same spectrum as X. Holmia was not isolated into a reasonably pure compound until 1911 following the work of O. Homberg and others. Between 1911 and 1945, a great deal of work was done on fractionating processes to separate pure holmium from other rare earths.

The metallic form of the element was produced in a powder form mixed with KCl by W. Klemm and H. Bommer in 1934. They reduced the anhydrous chloride with potassium vapor.

During the late 1940's and early 1950's separation methods were developed at the Ames Laboratory which carried out these fractionation processes automatically. At the present time, a number of industries are using ion exchange techniques to prepare pure holmium, and it can be obtained in high purity in commercial quantities if desired.