Holland is the third born (and last) daughter of her mother Virginia Taylor, and the only child of her father C.Tracy Taylor (an attorney). She was born in Philadelphia and spent her teen years in nearby Allentown Pa. where Holland got the nickname "Penny Taylor" because of her coppery hair color. Holland attended Quaker schools then majored in drama at Bennington college. At the age of 22 Holland moved to New York with the desire to become a "great big Broadway star." After fifteen years of "dissapointments and near misses" in New York and California Holland was cast as Ruth Dunbar in the sitcom Bosom Buddies with Tom Hanks. It was Hollands "breakout" role and it lead to many other TV and film offers including the movie Romancing The Stone as Kathleen Turners book publisher and friend. Holland had hesitated to accept the role but her acting coach and mentor Stella Adler encouraged her not to be so stage minded. In 1992 Holland was still living in Greenwhich Village New York and travelling back and forth between a rented apartment in Hollywood and New York in order to work on both coasts. Holland has said her first love was the theater but the work for her in TV and films was better. By 1992 However Holland said she was dealing with the back and forthing "less and less well". In the next few years Holland moved officially to California and in the last couple of years left her apartment in West Hollywood for her own home in the Hollywood Hills. Holland won an Emmy in 1999 for her work in The Practice. She said the recognition of her work means alot "to have a great part like this at my age is rich, rich, rich". Holland once said "I always thought i would end up marrying in my 60s". She is still single.