Holmium was discovered (1878) spectroscopically by Jacques-Louis Soret and Marc Delafontaine and independently (1879) by Per Teodor Cleve (Cleve, Per Teodor), who separated it chemically from erbium and thulium. Cleve named the element for his native city of Stockholm, Sweden, its Latinized name being Holmia. Holmium occurs associated with other rare earths in the minerals xenotime, euxenite, and many others; it also occurs in the products of nuclear fission. The classical methods of separating and purifying the element were fractional crystallization and precipitation, but ion-exchange technology has now made available kilogram quantities of highly pure holmium oxide. The silvery metal is produced by thermoreduction of the anhydrous fluoride HoF₃ with calcium. It is reactive and slowly attacked by oxygen and water. The one naturally occurring isotope, holmium-165, is stable; about two dozen radioactive artificial species are known.

Holmium behaves as a typical rare earth; it forms a series of yellow-brown salts, many of which are obtained in solution by dissolving the oxide Ho₂O₃ in the appropriate acid.