After retiring from pro football, Holmoe entered the coaching ranks, having been urged by LaVell Edwards to return to BYU as a graduate assistant. In 1992, Holmoe accepted an offer from Bill Walsh to join his staff at Stanford University as the defensive backs coach. Holmoe remained at Stanford for two seasons, helping the Cardinal become the Pac-10 co-conference champions in 1992 with a 10-3 overall record, including a win over Penn State in the Blockbuster Bowl.
Following Mariucci's departure to the NFL in 1997, Holmoe was named his successor as head coach. Holmoe, by his own admission, was an unsuccessful coach. During his five-year tenure at Cal, he compiled a 16-39 record, including a 9-31 record in Pac-10 play and a 1-10 season in 2001, the worst in the Golden Bears' history. Holmoe went 0-5 against archrival Stanford and failed to reach a bowl game as head coach. Holmoe resigned at the end of the 2001 season.
Shortly afterward, the Bears were found guilty of major NCAA violations when it emerged that a professor retroactively added two football players to a class he'd taught the previous spring in order to keep them eligible. Athletic department officials knew that the players were ineligible, but didn't tell anyone about it. As a result, the NCAA slapped Cal with five years' probation, stripped the Bears of their four victories from the 1999 season, banned them from postseason play in 2002 and took away nine scholarships over four years. When Jeff Tedford led the Bears to a 7-5 record in 2002, they were not allowed to play in a bowl game.
After resigning from Cal, Holmoe returned to Brigham Young to serve as Associate Athletic Director. In March 2005, he was appointed the 12th Athletic Director of the University, and the first to oversee both men's and women's athletics. Under his leadership, the Cougars have achieved enormous success, winning 14 conference championships in the 2006-2007 academic year alone. Holmoe has had particular success with his two most conspicuous coaching hires, BYU head football coach Bronco Mendenhall, who has led BYU's football team back to national prominence, and head men's basketball coach Dave Rose, who has returned BYU's men's basketball team to consistent Mountain West Conference championships and NCAA tournament appearances.