In 1032, Holzem is mentioned as “Hulcinesheim” in a document issued by Emperor Henry II. In 1428, the aldermen of Luxembourg City informed Münster Abbey that Claes and Johann of Holzem were to be considered serfs of the abbey from then on. In 1585, Margaretha, wife of Steffen Claes de Holzem, was sentenced to death for witchcraft and hanged at the Fetschenhof.
During the Thirty Years’ War, Croatian soldiers integrated into the imperial troops massacred the population of Holzem in 1636. The horrors of hunger and war were compounded by the spectre of the plague. Almost two thirds of the population died. When the French laid siege to the fortress of Luxembourg, Marshal Créqui moved the population of Holzem to the area around Longwy.
According to a census, the population fell from 80 in 1659 to just 30. Gerlingen, a neighbouring village, was completely decimated and wiped off the map.
In 1962, the centre of Holzem was completely rebuilt and a new school built.
The end of the 20th century saw the town prosper, with the construction of a large number of houses and the creation of an industrial and commercial zone along the Rue de Capellen.