Holmes came from a farming background in Hebburn-on-Tyne in the northeast of England. He graduated from Imperial College, London, in 1910, and went on to work with Lord Rayleigh on radioactivity. After an expedition to Mozambique in 1911 he taught at Imperial College until 1920 when he went to Burma as an oil geologist. In 1925 he returned to England to become professor of geology at Durham University, where he remained until 1943 when he moved to Edinburgh University.

Holmes conducted major work on the use of radioactive techniques to determine the age of rocks, leading to his proposal of the first quantitative geological time scale in 1913 and to his estimate of the age of the Earth being about 1600 million years. He continued to revise this estimate throughout his life, producing a figure in 1959 some three times larger.

Holmes also made a major contribution to the theory of continental drift proposed by Alfred Wegener in 1915. One of the early difficulties the theory faced was that geologists could not envisage a force capable of moving the continents in the way described by Wegener. In 1929 Holmes proposed the existence of convection currents in the Earth's mantle. Rocks in the Earth's interior are, according to Holmes, heated by radioactivity, causing them to rise and spread out and, when cold and dense, to sink back to the interior. It was only after World War II that hard evidence for such a view could be produced.

In 1944 Holmes published his Principles of Physical Geology, a major work on the subject. A substantially revised edition of this book was published in 1965, shortly before Holmes's death.