Born Charles John Holt III in Beverly Hills, California, he was the son of actor Jack Holt and his wife, Margaret Woods. He was sent to study at Culver Military Academy in Culver, Indiana from which he graduated in 1936 then immediately went to work in the Hollywood film business.

After five minor roles, in 1938, at the age of nineteen, Holt had a major role under star Harry Carey in The Law West of Tombstone. It would be the first of the many Western films he would make during the 1940s. At the same time, his sister, Jennifer Holt, would also become a leading star in the Western film genre.

Tim Holt had one of the leading roles in the Orson Welles 1942 drama, The Magnificent Ambersons but the following year he became a decorated combat veteran of World War II, flying in the Pacific theatre with the United States Army Air Forces as a B-29 bombardier. Tim Holt would return to filming after the war, appearing as "Virgil Earp" to Henry Fonda's, "Wyatt Earp" in director John Ford's Western, My Darling Clementine.

Holt would next be cast in the role that he is probably most remembered for and a film where his father appeared in a small part. Tim Holt portrayed "Bob Curtin" next to the Humphrey Bogart character of "Fred C. Dobbs" in John Huston's classic, The Treasure of the Sierra Madre. Made in 1946, Holt did another four Western films before "The Treasure of the Sierra Madre" would be released in 1948. Tim Holt made two dozen more Western films until 1952 when the genre's popularity waned. He would be absent from the screen for five years until starring in a less than successful horror film in 1957 then appeared in only two more uninspiring motion pictures during the next fourteen years.

In 1973, at the age of fifty-four, Tim Holt died from bone cancer in Shawnee, Oklahoma where he had been managing a radio station. He was interred in the Memory Lane Cemetery in Harrah, Oklahoma.

In 1991, Tim Holt was inducted posthumously into the Western Performers Hall of Fame at the National Cowboy & Western Heritage Museum in Oklahoma City, Oklahoma.