The EP is holiday music with a country pop inclination. It is mainly composed of cover versions of holiday hits and Christmas carols. However, Taylor also contributed two original songs to the album. She explained that decision in an interview with the Today Show in December 2007, saying:
The EP was originally titled Sounds of the Season: The Taylor Swift Holiday Collection. For the release, Taylor and Big Machine Records partnered with Target, who exclusively distributed the EP in the United States. It was commercially released via Target on October 14, 2007.
The EP was later released to other retailers, including the iTunes Store and Amazon.com, on December 2, 2008. On October 6, 2009, it was re-released by Target and made available as a digital download on the iTunes Store and Amazon.com, both making minor adjustments to its cover art and removing Sounds of the Season: from the title, leaving it as simply The Taylor Swift Holiday Collection.
Taylor first performed a song from The Taylor Swift Holiday Collection, “Silent Night”, on November 28, 2007, in New York City, at the Rockefeller Center. The performance was broadcast by The Today Show. She then performed “Christmases When You Were Mine” on November 29, 2007, in St. Charles, Missouri, at the Family Arena, as part of her set for WIL‘s Jinglefest 2007, and “Santa Baby” in Bloomington, Minnesota, at the Mall of America on December 8, 2007. Taylor appeared on the Today Show again on Christmas Day of 2007, performing “Christmases When You Were Mine” and “Silent Night”.
Music critics received the album with favorable responses. Stephen Thomas Erlewine of AllMusic rated the album three stars and said its songs were “all crisp, cheerful arrangements that are suitably seasonal but also faithful to her bright country-pop.” Craig Shelburne of CMT said, “Thanks to this teen star, a new generation of sensitive girls may discover the melancholy but oh-so-melodic ‘Last Christmas’. She also includes two original holiday songs.” Dan Maclntosh of Country Standard Time concluded, “Swift is a fine singer, who finds ways to inject sincere emotion into every line she sings. They say the best things come in small packages. And that saying holds true for Swift’s new one.” In the Pittsburgh Tribune-Review, Kellie B. Gormly commented that the EP was “sweet” and highlighted the “deeply spiritual” track “Christmas Must Be Something More” as a standout.
David Yonke in The Blade said that he wished the EP had been longer, and selected two tracks as highlights: “Christmases When You Were Mine” (“a mature, wistful ballad”) and “Santa Baby” (“a sassy wink-and-a-nod”). A review in the Deseret News by Scott Iwasaki complimented Taylor’s self-penned songs and said the EP overall was fine, with the exception of “Silent Night”, which he found heavy on the arrangement. Billboard ranked the album as the 18th-best Christmas album of the twenty-first century.
On the week ending December 8, 2007, The Taylor Swift Holiday Collection debuted at No. 88 on the Billboard 200. It debuted at No. 18 on the Top Country Albums chart, selling 15,000 copies first-week. The following week, the EP rose to a new peak at No. 46 on the Billboard 200. Following its 2009 re-release, The Taylor Swift Holiday Collection re-entered the Billboard 200 at No. 20, its peak, and extended its run on the chart to 24 weeks. For the 2007 holiday season, the EP peaked at No. 18 on Top Country Albums and at No. 22 on Top Holiday Albums, and for the 2009 holiday season, it peaked at No. 14 on both Top Country Albums and Top Holiday Albums. For the 2010 holiday season, The Taylor Holiday Collection re-entered the Top Holiday Albums Chart at No. 1. As of July 2019, the EP had sold 1.08 million copies in the United States.