A combination live/dead tool holder for use on an indexing tool turret of a machine tool includes a live tool holder as well as a dead tool holder mount. The dead tool holder mount is configured to interchangeably mount to a variety of different dead tool holders. The tool holder includes a y-axis adjustment mechanism that facilitates adjustment of the position of the tool holder relative to the turret along the y axis (i.e., along a circumferential direction of the turret).