Labor won 33 of the country`s 63 seats in a vote with a 47% turnout, beating the People`s National Party of Prime Minister Portia Simpson Miller.
Jamaica is heavily indebted, but austerity measures introduced by Ms Simpson Miller have led to growth.
"We don`t take it that we have won a prize," Mr Holness told supporters. "The cost of victory is to keep the commitments we have made."
During the campaign, Mr Holness said he wanted to turn Jamaica into "the Silicon Valley of the Caribbean".
Youth unemployment in the country currently stands at 38%.
In 2013, under Ms Simpson Miller, the country agreed to a four-year International Monetary Fund (IMF) loan package in exchange for swapping its debt.
Inflation fell to a 48-year low during her time in office. Last year GDP grew by 1.3%, according to World Bank figures.
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