Holdheim went to Prague and subsequently to Berlin to study philosophy and the humanities; and his keen intellect, combined with his eagerness to learn, made it possible for him to reach his goal in an incredibly short time, though the lack of preliminary systematic preparation left its imprint upon his mind, to a certain degree, to the last. Under Samuel Landau of Prague he continued also his Talmudical studies. While still a young man it became his ambition to occupy a rabbinical position in a larger German town; for he desired to show the older rabbis that secular and philosophical scholarship could well be harmonized with rabbinical erudition. But he had to wait until 1836, when, after several disappointments elsewhere, he was called as rabbi to Frankfurt (Oder). Here he remained until 1840, encountering many difficulties, due both to the distrust of those within the congregation who suspected the piety of a rabbi able to speak grammatical German, and who was a graduate of a German university, and to the peculiar legislation which in Prussia under Frederick William III regulated the status of the Jewish congregations.
While in Frankfurt, Holdheim scrupulously decided every question according to the halakha. In his pulpit discourses belonging to this period the intention is plain to steer clear of mere rationalistic moralizing, on the one hand, and dry legalizing and unscientific speculation (in the style of the old derashah), on the other. Holdheim thus deserves to be remembered as one of the pioneers in the field of modern Jewish homiletics, who showed what use should be made of the Midrashim and other Jewish writings. He also repeatedly took pains to arouse his congregation to help carry out Abraham Geiger's and Ludwig Philippson's project of founding a Jewish theological faculty. Judaism even then had ceased for Holdheim to be an end unto itself. He had begun to view it as a force in the larger life of humanity.
In the meantime Holdheim had received the degree of Ph.D. from the University of Leipzig, and had come to be looked upon by congregations as well as by Jewish scholars as a leader (see Orient. Lit. 1840, No. 35 et passim; Jost's Annalen, 1840, No. 39). Frankfurt having become too restricted a sphere for him, he accepted a call to Schwerin as Landesrabbiner, leaving Frankfurt on August 15, 1840.
The foundation of the Reform Verein in Frankfurt am Main led to another agitation in German Jewry. Einhorn, Stein, Samuel Hirsch, and others deplored the rise of the Verein as a step toward schismatic separation. The obligatory character of the rite of circumcision was the focal issue discussed by no less than forty-one rabbis. Holdheim, in his Ueber die Beschneidung Zunächst in Religiös-Dogmatischer Beziehung (Schwerin and Berlin, 1844), takes the position that circumcision is not, like baptism, a sacrament of initiation, but is merely a command like any other. Nevertheless he classifies it not as a national but as a Jewish religious law, and pleads for its retention. Indeed, he was not unreservedly an adherent of the program of the Frankfurt Reform Verein. This is clear from his Vorträge über die Mosaische Religion für Denkende Israeliten (Schwerin, 1844). While the Verein assumed unlimited possibilities of development, according to Holdheim the Mosaic element, after the elimination of the national, is eternal. Religion must be placed above all temporal needs and desires. To yield to the spirit of the age would make that spirit the supreme factor and lead to the production of a new 19th century Talmud as little warranted as was the Talmud of the 5th century.
Mosaism as contained in the Bible is the continuous religion of Judaism. The belief in this revelation is the constant factor in all variants of Judaism. This is also the main thesis of his Das Ceremonialgesetz im Messiasreich (Schwerin and Berlin, 1845). He shows the inconsistency of Talmudism, which, assuming the inviolability of all Biblical laws, still recognizes the suspension of many. Hence the Talmudic insistence on the restoration of the Jewish state. Some ceremonial laws were meant to assure the holiness of the people; others to assure that of the priests. These ceremonies lose their meaning and are rendered obsolete the moment Israel no longer requires special protection for its monotheistic distinctness. As soon as all men have become ethical monotheists, Israel is nowhere in danger of losing its own monotheism; nor is its distinctness further required. Hence in the Messianic time the ceremonies will lose all binding or effective force. This book, too, called forth much discussion, in which Reform rabbis like Levi Herzfeld took a stand opposed to Holdheim's. Answering some of his critics' objections, Holdheim insisted upon being recognized as an adherent of positive historic Judaism. The doctrines, religious and ethical, of Biblical Judaism are, he claimed, the positive contents of Judaism; and a truly historical reform must, for the sake of these positive doctrines, liberate Judaism from Talmudism.
Holdheim, consulted among others when the Jüdische Reformgenossenschaft was founded in Berlin, was called to be its rabbi and preacher in 1847. As leader of the Reformgenossenschaft he had a share in the editing of its prayer-book. He instituted the radical rejection of keeping Saturday as the Jewish Sabbath, and instead moved its observance to Sunday to keep the behavior of Reform Jews in line with Christian thought. Under his rule the observance of the second days of the holy days (except the second day of Rosh ha-Shanah) were abolished.
He officiated at so-called "mixed" marriages (see his Gemischte Ehen Zwischen Juden und Christen, Berlin, 1850). He had to defend his congregation against many attacks (see his Das Gutachten des Herrn L. Schwab, Rabbiner zu Pesth, ib. 1848). Though engaged in many ways in the development of his society and in the organization of its institutions, during the thirteen years of his stay in Berlin he wrote a text for schools on the religious and moral doctrines of the Mishnah (Berlin, 1854), a criticism of Stahl (Ueber Stahl's Christliche Toleranz, ib. 1856), and a catechism (Jüdische Glaubens-und Sittenlehre, ib. 1857). He also wrote a history of the Reformgenossenschaft (Gesch. der Jüdischen Reformgemeinde, 1857) and a more ambitious work (in Hebrew) on the rabbinical and Karaite interpretations of the marriage laws (Ma'amar ha-Ishut, 1860).
Holdheim died suddenly at Berlin on August 22, 1860. Sachs objected to his interment in the row reserved for rabbis in the Jewish cemetery, but Oettinger granted permission for the burial. Holdheim was laid to rest among the great dead of the Berlin congregation, Abraham Geiger preaching the funeral oration.