Theatrical careerIn the summer of 1924, Holman left for New York City, where she first lived at the Studio Club. Her first theater job in New York was in the road company of The Fool. Channing Pollock, the writer of The Fool, recognized Holman's talents immediately and advised her to pursue a theatrical career. She followed Pollock's advice and soon became a star. An early stage colleague who became a longtime close friend was future film star Clifton Webb, then a dancer. He gave her the nickname, "The Statue of Libby." HerBroadway theatre debut was in the play The Sapphire Ring in 1925 at the Selwyn Theatre, which closed after thirteen performances. She was billed as Elizabeth Holman. Her big break came while she was appearing with Clifton Webb and Fred Allen in the 1929 Broadway revue The Little Show, in which she first sang the blues number, "Moanin' Low" by Ralph Rainger, which earned her a dozen curtain calls on opening night, drew raves from the critics and became her signature song. Also in that show she sang the Kay Swift and Paul James song, "Can't We Be Friends?" The following year, Holman introduced the Howard Dietz and Arthur Schwartz standard "Something to Remember You By" in the show Three's a Crowd, which also starred Allen and Webb. Other Broadway appearances included The Garrick Gaieties (1925), Merry-Go-Round (1927), Rainbow (1928), Ned Wayburn's Gambols (1929), Revenge with Music (1934), You Never Know(1938, score by Cole Porter), during which production she had a strong rivalry with the tempestuous Mexican actress Lupe Vélez; and her self-produced one-woman revue Blues, Ballads and Sin-Songs (1954).
One of Holman's signature looks was the strapless dress, which she has been credited with having invented, or at least being one of its first high profile wearers.