A tool holder for holding cutting inserts for machine tool work includes an integral cooling passage therethrough. Various coolant nozzles are interchangeably installable in the holder, to provide different amounts of coolant fluid flow depending upon the specific work being accomplished. The portion of the cooling passage in the tool holder adjacent to the installed nozzle, as well as the nozzles, are devoid of bends or changes in direction of the coolant flow path for greater efficiency and to ensure that the coolant flow is directed precisely at the cutting tip of the insert regardless of the radial orientation of the nozzle. The nozzles each incorporate a non-circular, preferably triangular, coolant outlet tip, which cross sectional shape blends smoothly with the circular cross sectional shape of the nozzle inlet and passage through the tool holder. The triangular cross section of the latter portion and outlet of the nozzle passage precludes any significant circumferential flow vector of the fluid flowing therethrough and flattens the sides of the fluid stream, thus precluding any significant pressure drop along the sides of the stream or expansion due to centrifugal reaction which would tend to pull the stream apart. The result is a cohesive stream which maintains its fluid force as it passes through the air from the nozzle to the insert cutting edge and workpiece. The tool holder may be adapted for use as a stationary holder for use with rotating workpieces, or as a rotating holder for use with relatively stationary workpieces.