It was while studying at the Design School that Kastholm met cabinetmaker Preben Fabricius who became his partner for a number of years. They had a common approach to furniture design, never wanting to compromise on quality. Speaking of their partnership, Kastholm commented: "We had the same basic approach, we both wanted to minimize. I had been to the United States and seen furniture by Eames and Mies van der Rohe and it inspired us. The simplest lasts longest. At school we had learnt that timelessness was an ideal."

In 1961, the pair set up a design studio in a Gentofte cellar without any firm arrangements with manufacturers. In 1965, they exhibited at the furniture fair in Fredericia where the German furniture manufacturer Alfred Kill noticed their work. Kill had a reputation for high quality but initially, Fabricius and Kastholm were not keen to design furniture for factory production. Only when Kill offered them DM 2,500 a month each, with no preconditions, did they agree to work for him. They travelled to Stuttgart with their first designs for production in Kill's factory in nearby Fellbach.

Their international breakthrough came at the Cologne Fair in 1966 when they exhibited a whole series of office and home furniture leading to orders from ten large furniture concerns. Their minimalistic designs, both attractive and comfortable, were usually in steel and leather.

The Tulip Chair FK 6725, the Grasshopper Chair FK 87 and the Scimitar Chair are among their most successful works. The pieces of furniture they produced during their seven-year period of cooperation from 1961 to 1968 were so distinctive that many are still produced today as classics. As a result of disagreements, the pair decided to terminate their cooperation in 1968.

Kastholm was later appointed professor at Bergische Universität in Wuppertal near Düsseldorf where he taught design from 1975 to 1996. He also designed furniture at his office in Germany as well as in his house in the mountains on the island of Majorca. He returned to Denmark shortly before he died in June 2007.