Born in Poland, Barenholtz secured his first job in the film business at age 23, when he became the assistant manager of a New York movie house in 1958. It was in 1968 that Barenholtz first made an impression on the indie film world when he opened the Elgin on Eighth Avenue and 23rd Street in Manhattan. While ignored by the majors, the Elgin found a niche. Barenholtz first earned his place in movie history by originating the "Midnight Movie" concept for cultists and the youth/college market with such films as Alexander Jodorowsky's "El Topo" (1971), John Waters' "Pink Flamingos" (1972) and "The Harder They Come" (1972). Considered "underground" or "avant garde", they earned the first lap of their fame by their frequent midnight showings. In 1975 when he formed Libra Films, Barenholtz took the step toward distributing the very genre of films he was exhibiting. Among those distributed by Libra were Charles Tacchella's "Cousin, Cousine" (1975), which earned three Oscar nominations and proved to be one of the most critically-acclaimed and financially successful foreign films ever distributed in the USA, David Lynch's "Eraserhead" (1977) and John Sayles' "Return of the Secaucus Seven" (1980). Barenholtz sold Libra Films to the Almi Group in 1982, but stayed with the buyer to become president of Libra-Cinema 5 Films. But in 1984, after he and Almi parted ways, Barenholtz joined with Ted and Jim Pedas to form Circle Releasing Corporation. Among the films released by Circle were "Blood Simple" (1988), the first film by Ethan and Joel Coen, Vincent Ward's "The Navigator" (also 1988) and John Woo's "The Killer" (1989). Barenholtz went on to either produce or arrange financing and/or distribution for a host of filmmakers working outside the studio system. It was the Coen's second film, "Raising Arizona" (1987), that Barenholtz took the plunge and became a producer. That movie, about the relationship between a petty crook (Nicholas Cage) and the female cop (Holly Hunter) who always arrested him, became a critical and financial success. Barenholtz continued his association with the Coens on "Miller's Crossing" (1990) and "Barton Fink" (1991), which won the prestigious Palme d'Or at the Cannes Film Festival.
Barenholtz continued to nurture first-time and established independent filmmakers. He was executive producer on Adele Drabinski's 1992 "Cheat" and served as executive producer on Gregory Hines' directorial debut, "Bleeding Hearts" (also 1992), a look at interracial romance. Barenholtz saw his 1995 effort as executive producer, "Georgia", earn greater recognition. From a screenplay by Barbara Turner and directed by Ulu Grosbard, "Georgia" was the story of a singer (Jennifer Jason Leigh) who idolizes her older, more successful sister (Mare Winningham), yet is usually estranged from her and self-destructive in her own life.
Barenholtz has also appeared on camera in the documentary "The Hicks in Hollywood" (1991) discussing independent filmmaking and he had a bit role in "Liquid Sky" (1982) about a lesbian whose patio becomes a UFO landing pad. (Barenholtz also distributed the film.)