We demonstrate that a transition from decelerated to accelerated cosmic expansion arises as a pure interaction phenomenon if pressureless dark matter is coupled to holographic dark energy whose infrared cutoff scale is set by the Hubble length. In a spatially flat universe the ratio of the energy densities of both components remains constant through this transition, while it is subject to slow variations for non-zero spatial curvature. The coincidence problem is dynamized and reformulated in terms of the interaction rate. An early matter era is recovered since for negligible interaction at high redshifts the dark energy itself behaves as matter. A simple model for this dynamics is shown to fit the SN Ia data. The constant background energy density ratio simplifies the perturbation analysis which is characterized by non-adiabatic features. © 2007 IOP Publishing Ltd.