A tool holder assembly comprises a tool support having a toolholding recess for releaseably holding a work tool and a mounting shank slideably disposed within a bore provided in a machine tool so that the work tool position may be adjusted by adjustably sliding the mounting shank relative to the machine tool. An adjustment device connected between the tool support and the machine tool enables very accurate adjustment of the work tool position. The adjustment device comprises an externally threaded tubular shaft connected to the machine tool and slideably receiving therethrough the mounting shank, and an internally threaded hollow sleeve rotatably connected to the tool support and threaded onto the tubular shaft. The hollow sleeve is rotatably connected to a support flange affixed to the tool support by means of a set of antifriction rollable members housed in bearing races formed directly in the support flange and the hollow sleeve. A series of blind holes are provided around the outer surface of the hollow sleeve and a tool inserted into the blind holes enables manual rotation of the hollow sleeve to effect axial displacement of the tool support and thus the work tool relative to the machine tool.