In April 1775 Holden was appointed a captain in Varnum's Regiment, newly raised by the Rhode Island Assembly. On December 31 Varnum's regiment, whose men had enlisted for a fixed term until the end of the year, was disbanded, and Holden was recommended for promotion to major. In October 1776 he was appointed quartermaster to the Rhode Island Brigade. He was elected a captain in the Warwick Alarm Company in April 1778 and the following month commissioned colonel of the 1st Regiment of the Kent County Militia, with which he took part in the Newport Campaign.