Holdsworth started his career at Watford in the mid 1980s, going on to make more than 250 league appearances for the club. At Watford he played alongside his brother Dean Holdsworth.
In March 1999 Holdsworth transferred to Birmingham City. He helped Birmingham to the play offs at the end of that season where they faced his former club Watford. However Holdsworth was sent off as they lost on penalties. He spent three full seasons there, helping them to the 2001 League Cup Final in which he was an unused substitute in the defeat to Liverpool. In January 2002 he went on loan to Walsall. At Walsall he scored once against Coventry but was sent off twice in 3-0 defeats to Sheffield Wednesday and Wolves.
Later career
After being released by Birmingham in 2002, he joined Bolton Wanderers on a free transfer where he played alongside his brother Dean again. However, he only made one appearance for the Trotters: in a League Cup defeat to Bury. Shortly afterwards he joined Scarborough in the Football Conference and then Scottish club Gretna where he retired. Whilst at Gretna he scored once, his goal coming in the Scottish Cup against Dumbarton.
After retiring from playing he became reserve team manager at Gretna, where he was appointed director of youth development in May 2006, but was sacked in a cost-cutting exercise a few months later. On 20 May 2008, Holdsworth was appointed to his first managerial role, taking over at Northern Premier League Premier Division side Ilkeston Town from Nigel Jemson, the first appointment of new owner Check Whyte. On 29 December 2008 Holdsworth was appointed as the new manager of Conference National club Mansfield Town having led Ilkeston to sixth in the Northern Premier LeaguePremier Division, ten points off first placed Hednesford Town with two games in hand. On 18 November 2010, it was announced that Holdsworth had agreed to leave Field Mill by mutual consent after less than two years with the club. On 24 October 2011, Holdsworth was named Lincoln City manager until the end of the 2011–12 season, replacing Steve Tilson. He left the club by mutual consent on Sunday 17 February 2013, leaving Lincoln 18th in the Conference Premier. On 14 October 2013, he returned to management with Goole with his former Sheffield United teammate Curtis Woodhouse acting as his assistant. Holdsworth stepped down as Goole manager on 27 January 2014 with Woodhouse taking over the role. On 3 August 2018 Holdsworth was appointed as director of football at Carlisle United.
Personal life
His twin brother Dean Holdsworth is also a footballer turned football manager. On 18 September 2010, they became the first twins to manage against each other in the top five divisions of English football, when Dean was manager of Newport County and David manager of Mansfield Town. Newport won the match 1–0. David Holdsworth's house was featured on an episode of Through the Keyhole.