Johan Theodor was born 14 June 1731 in Nyborg on the Danish island of Funen as the oldest of eight children to Nicolai Holm and Cathrine Lucie née v. Lengerchen. He first trained with his father who was a surgeon before studying medicine at the University of Copenhagen, graduating in 1760.
During the last three years of his studies, from 1757 to 1769, he toured Europe with professor Friis Rottbøll who paid for his travels. They visited a number of universities in Germany, the Netherlands and France and formed many close bonds with prominent colleagues. In Leiden and Paris Holm collected specimens for a herbarium which was later presented to the King as a gift.
In 1762 he became a professor in medicine and natural history at Sorø Academy. There he founded a botanical garden before leaving the academy with a pension in 1765. At that point he also abandoned his medical career for good, instead turning to various administrative pursuits and his interest in botany.
In 1767, Holm was appointed director general of the Danish Postal Services in Copenhagen, a position which he held until his death in 1793. From 1772, he also served as cabinet secretary for Dowager Queen Juliana Maria, stepmother of King Christian VII. She held him in high esteem.
Due to his good relations with the royal family, particularly the Queen, he was, in the early 1770s, contacted by Frantz Heinrich Müller, a pharmacist and mineralogist who was setting up a porcelain factory. This led to the foundation of the Royal Danish Porcelain Factory in 1775, with the King as a co-owner, Juliana Maria as a protector and Holmskiold as its first director-in-chief. In 1779, he took full control of the company and remained head of the factory for the rest of his life.