In 1899, Holmes volunteered for service in South Africa. The company left for South Africa in November 1899, and on arrival was incorporated in the Australian Regiment. Originally an infantry unit, it became mounted in February. He saw action at Colesberg, Pretoria and Diamond Hill in June 1900, where he was wounded. Holmes was mentioned in despatches, promoted to brevet lieutenant colonel, and awarded the Distinguished Service Order (DSO). He returned home in August 1900.