The dynasty was founded with Malhar Rao, who joined the service of the Peshwas of the Maratha Empire in 1721, and quickly rose to the ranks of Subedar. The name of the dynasty was associated with the title of the ruler, who was known informally as Holkar Maharaja.
The Holkars claim descent from the royal family of Udaipur. The sun in their emblem asserts their Suryavanshi lineage.
Malhar Rao Holkar (1694-1766), a Maratha chief serving PeshwaBaji Rao, established the dynasty's rule over Indore. In the 1720s, he led Maratha armies in Malwa region, and in 1733 was granted 9 parghanas in the vicinity of Indore by the Peshwa. The township of Indore had already existed as an independent principality established by Nandlal Mandloi of Kampel, sanctioned by a Mughal Imperial order, dated 3 March 1716.Nandlal Mandloi granted the Maratha force access and allowed them to camp across the Khan (Kanh) River. In 1734, Malhar Rao established a camp later called Malharganj. In 1747, he started the construction of his royal palace, the Rajwada. By the time of his death, he ruled much of Malwa, and was acknowledged as one of the five virtually independent rulers of the Maratha Confederacy.
Tookajee Rao Holkar II, Indore, from a drawing by Mr. W. Carpenter, Jun.," from the Illustrated London News, 1857
Attempts by Yashwantrao Holkar to unite the kings failed, and he was approached to sign a peace treaty with the British. The Treaty of Rajghat, signed late December 1805, recognised him as a sovereign king and returned all his territories, including Jaipur, Udaipur, Kota, Bundi, and some Rajput lands from other kings.
In 1811, the four-year-old MaharajaMalharrao Holkar II succeeded Yashwantrao Holkar. His mother, Maharani Tulsabai Holkar, looked after the administration. However, with the help of Pathans, Pindaris, and the British, Dharama Kunwar and Balaram Seth plotted to imprison Tulsabai and Malharrao. When Tulsabai learnt about this, she beheaded both of them in 1815 and appointed Tantia Jog. As a result, Gaffur Khan Pindari secretly signed a treaty with the British on 9 November 1817 and killed Tulsabai on 19 December 1817.
The British, led by Sir Thomas Hislop, attacked on 20 December 1817. In the Battle of Mahidpur, the British defeated the army led by 11-year-old Maharaja Malharrao Holkar II and his 20-year-old generals, Harirao Holkar and Bhimabai Holkar. At the deciding moment Nawab Abdul Gaffur Khan betrayed the Holkars and left the battlefield along with his army. In return, the British gave the Jahagir of Jawara to Gaffur Khan.
The treaty was signed on 6 January 1818 at Mandsaur. Bhimabai Holkar did not accept the treaty, and kept attacking the British by guerilla methods. Rani Lakshmibai of Jhanshi took inspiration from Bhimabai Holkar and also fought against the British. At the conclusion of the Third Anglo-Maratha War, the Holkars lost much of their territory to the British and were incorporated into the British Raj as a princely state of the Central India Agency. The capital was shifted from Bhanpura to Indore.
Malharrao Holkar III entered Indore on 2 November 1818. Tantia Jog was appointed his Diwan as he was a minor. As the old palace was destroyed by the army of Daulat Rao Scindia, a new palace was constructed in its place. Malharrao III was succeeded by Martandrao Holkar, who formally ascended to the throne on 17 January 1834. But he was replaced by Harirao Holkar, nephew of Yashwantrao, who ascended to the throne on 17 April 1834. He adopted Khanderao Holkar on 2 July 1841 and died on 24 October 1843. Khanderao was formally installed as the ruler on 13 November 1843, but he suddenly died on 17 February 1844. Tukojirao Holkar II (1835–1886) was installed on the throne on 27 June 1844. During the Indian Rebellion of 1857, he was loyal to the British East India Company. In October 1872, he appointed T. Madhava Rao as the Diwan of Indore. He died on 17 June 1886 and succeeded by his eldest son, Shivajirao.
On 22 April 1948 the Maharaja of Indore signed a covenant with the rulers of the adjoining princely states to form a new state known as Madhya Bharat. Madhya Bharat was created on 28 May 1948. On 16 June 1948, the princely state of Indore, which the House of Holkar ruled, merged with the newly independent Indian states.