A cutter holder has a holder, a collet, and a nut. The holder has a first threaded portion having an external thread, a first abutting surface, a second abutting surface, at least one recess, and at least one sealing member. The at least one recess is recessed in the second abutting surface. The at least one sealing member is mounted in the at least one recess and partially protrudes from the second abutting surface. The nut has a second threaded portion having an internal thread, a third abutting surface, and a fourth abutting surface. The internal thread and the external thread are corresponding internal and external trapezoidal threads, respectively. The third abutting surface and the first abutting surface have a corresponding diameter with a clearance therebetween being less than 0.015 millimeter. The fourth abutting surface and the at least one sealing member are in an interference fit.