He shared the Nobel Prize in Physiology or Medicine in 1968 (with Har Gobind Khorana and Marshall Warren Nirenberg) for describing the structure of alanine transfer RNA, linking DNA and protein synthesis.

During World War II Holley spent two years working under Professor Vincent du Vigneaud at Cornell University Medical College, where he was involved in the first chemical synthesis of penicillin.

He began his research on RNA after spending a year's sabbatical (1955–1956) studying with James F. Bonner at the California Institute of Technology.

A few years later the method was modified to help track the sequence of nucleotides in various bacterial, plant, and human viruses.

In 1968 Holley became a resident fellow at the Salk Institute for Biological Studies in La Jolla, California.