The main town and the site of its municipal council was the town of Fensmark. The municipality was created in 1966 when the following parishes were combined: Fensmark-Rislev Parish and Holme-Olstrup Parish. As the result of kommunalreform ("Municipality Reform") in 1970, Toksværd Parish was incorporated into Holmegaard municipality, and Rislev Parish was incorporated into Næstved municipality.

Holmegaard municipality ceased to exist as the result of ''Kommunalreformen'' ("The Municipality Reform" of 2007).