In 1854, when Kansas Territory was opened up for settlement, he became one of the first settlers. His wife, Mary Dillon Jones, remained behind in Pennsylvania until after the birth of their two children, Lillie and Charles. Holliday settled first at Lawrence, Kansas and became active in the Free State movement. Believing Kansas would become a free state, he and several business associates decided to establish the town of Topeka as the capital of the new state of Kansas. He was Topeka's delegate to the Wyandotte Constitutional Convention in July 1859. That same year he was elected to the first of several terms as mayor of Topeka. He helped found the Kansas Republican Party. Holliday was a member of both the territorial and state legislatures.