When the American War began, he joined the frigate under Captain George Elphinstone. After a year he transferred to , the flagship of Commodore William Hotham, and was First Lieutenant of her during the encounter between Admirals Richard Howe and the Comte d'Estaing off Rhode Island on 10 August 1778, where the opposing squadrons were arrayed in line of battle when a storm broke, scattering the ships and preventing a battle from taking place. Towards the end of the year, Commodore Hotham was sent to Barbados, to reinforce Rear-Admiral Samuel Barrington's squadron, with 5,000 troops for the capture of St. Lucia. Some time after the conquest of the island, Holloway moved with Hotham into the , but soon joined the , flagship of Admiral Sir Hyde Parker, who promoted him to commander.