Holzer belongs to the feminist branch of a generation of artists that emerged around 1980, looking for new ways to make narrative or commentary an implicit part of visual objects. Her contemporaries include Barbara Kruger, Cindy Sherman, Sarah Charlesworth, and Louise Lawler.

Holzer is mostly known for her large-scale public displays that include billboard advertisements, projections on buildings and other architectural structures, as well as illuminated electronic displays. The main focus of her work is the use of words and ideas in public space. Originally utilizing street posters, LED signs became her most visible medium, though her diverse practice incorporates a wide array of media including bronze plaques, painted signs, stone benches and footstools, stickers, T-shirts, paintings, photographs, sound, video, light projection, the Internet, and a Le Mans race car.

Holzer's first public works, Truisms (1977–9), appeared in the form of anonymous broadsheets that she printed anonymously in black italic script on white paper and wheat-pasted to buildings, walls and fences in and around Manhattan. These one-liners are a distillation of an erudite reading list from the Whitney Independent Study Program, where Holzer was a student. She printed other Truisms on posters, T-shirts and stickers, then carved them in the stone of public benches. In 1981, Holzer initiated the Living series, which she printed on aluminum and bronze plaques, the presentation format used by medical and government buildings. In 1982, the artist installed for the first time a large electronic sign on the Spectacolor board at Times Square, New York.[ Sponsored by the Public Art Fund program, the use of light-emitting diode (L.E.D.) allowed Holzer to reach a larger audience. The texts in her subsequent Survival series, compiled in 1983-85, speak to the great pain, delight, and ridiculousness of living in contemporary society. Holzer began working with stone in 1986. In her 1986 exhibition at Barbara Gladstone Gallery in New York, she introduced a total environment, where viewers were confronted with the relentless visual buzz of a horizontal LED sign and stone benches leading up to an electronic altar. This practice culminated in the installation at the Guggenheim Museum in 1989 of a 163 meter-long sign, forming a continuous circle spiraling up the parapet wall.

For the Venice Biennale in 1990, Holzer designed posters, hats, and T-shirts to be sold in the streets of Venice, while her LED signboards and marble benches occupied the solemn and austere exhibition space (the original installation is retained in its entirety in the collection of the Albright-Knox Art Gallery in Buffalo, the organizing institution for the American Pavilion at the 1990 Venice Biennale). Text-based light projections have been central to Holzer’s practice since 1996.

Holzer wrote texts herself for a long time between 1977 and 2001. However since 1993, she has been mainly working with texts written by others. Some of these are literary texts by great authors such as the Polish Nobel laureate Wislawa Szymborska, Henri Cole (USA), Elfriede Jelinek (Austria), Fadhil Al-Azawi (Iraq), Yehuda Amichai (Israel) and Mahmoud Darwish (Palestine). She also uses texts from different contexts, such as passages from de-classified US Army documents from the war in Iraq. For example, a large LED work presents excerpts from the minutes of interrogations of American soldiers who had committed human rights violations and war crimes in Abu Ghraib, making what was once secret public. Holzer's works often speak of violence, oppression, sexuality, feminism, power, war and death. Her main concern is to enlighten, bringing to light something thought in silence and meant to remain hidden.

The artist's focus on the use of language and ideas in public space often producing shocking juxtapositions such as comments on sexual identity and gender relations (“Sex Differences Are Here To Stay” on an unassuming New York movie theater marquee, for example) to flights of formal outrage (“Abuse Of Power Comes As No Surprise” in gigantic LED lights over Times Square). Critic Samito Jalbuena asserts that such deadpan social critique and semiotic ambiguities implicit in the interplay between the linguistic signifier and the concept signified are worthy elements of protest art, since they subvert hierarchy, and are against the perceived injustices of a largely patriarchal, fascist, and capitalist society.