The company was founded on 17 February 1896 by H. M. Heyerdahl and Albert Fenger Krog as the leading executives.

The goal was to build a suburban tramway—the Holmenkoll Line—from the Holmenkollen neighborhood in northwestern Oslo to the end of the street tramway at Majorstuen.

[2] To offer direct services into the city center, the company started the construction Common Tunnel (Fellestunnelen) to the underground Nationaltheatret Station.

To save the company, the municipal owned Akersbanerne agreed to a merger between A/S Holmenkolbanen and two of Akersbanerne's three lines—the Smestad Line and the under construction Sognsvann Line that would both share the tunnel into the center, with the transaction taking place on 16 November 1933.

A/S Holmenkolbanen remained a separate company until 6 May 1992, when it was fully merged with Oslo Sporveier.