Holland, who had thrown eight interceptions in the first three games, was 21-for-35 for 311 yards and only one interception. Dave Osborn caught five passes for 101 yards.
Colorado State (1-3) was off to its worst start since opening the 1987 season with six straight losses.
Montana State (1-2) suffered its 18th consecutive loss to 1-A opponents. The Bobcats had 308 yards of total offense against a defense that had allowed 476 yards a game.
Quarterback Travis Lulay threw for 196 and two touchdowns and ran for 66 yards.
Holland threw two touchdown passes in the last two minutes of the first half as Colorado built a 27-7 lead.
Half back Joel Dreessen made a one-handed catch in the end zone on a 10-yard pass from Holland with 1:58 left made it 20-7.
The Rams got the ball back at the Montana State 38 with 45 seconds remaining after Adam Lancisero blocked Lulay's punt. Four plays later Holland connected with David Anderson on a 12-yard scoring strike.
Colorado State drove 80 yards on eight plays, the first two completions from Holland to Anderson and Johnny Walker, on its first possession to reach midfield. Uldis Jaunarajs, who had 79 yards rushing, covered the final 50 yards of the drive including a 1-yard dive for a touchdown.
Babcock booted field goals of 34 and 35 yards to increase the lead to 13-0 midway through the second quarter. Brandon Cathy set up the second field goal returning an interception 19 yards to the Bobcat 15.
The field goal woke up the Montana State offense. Lulay ran 33 yards through arm tackles to the Colorado State 14. Two plays later Lulay connected with Chaz Guinn on a 16-yard TD pass with 3:35 left in the first half to get the Bobcats within 13-7.
Neither team scored in the second quarter. E.J. Cochrane missed a 30-yard field goal on Montana State's first possession and Colorado State had a drive ended when Toph Grenfell intercepted Holland's pass in the end zone.
Babccok kicked a 30 yard field goal early in the fourth quarter.
Lulay threw a 5-yard touchdown pass to Guinn with 8:32 left. Moments later Tristian Walker had a 3-yard TD run for Colorado State.