In 1988 Holmes drove for Morales Motorsports in the No. 21 Jiffy Mixes March 88C-Cosworth DFX. During the season Holmes got a best finish of seventh at the Quaker State 500 at Pocono International Raceway. Holmes also had a good run at the Indianapolis 500, starting 33rd (last) and finishing 12th. Holmes finished the season with an eighth-place finish at the Nissan Indy Challenge at Tamiami Park in what was Holmes' final Indy car race. Holmes finished 18th in the CART standings and 12th in the USAC standings.