The guidance properties of the holey fiber are determined by the solid-silica core region and the size and pattern of air holes. The fundamental principle of parametric wavelength conversion is presented by the coupled-wave equations. The relation between phase mismatch and pump wavelength with a fixed signal wavelength is analyzed. Conversion efficiency of a holey fiber based parametric wavelength conversion is calculated by the numerical simulation and compared with the measured result, which indicates that numerical calculation is coincident with the experimental measurement. A maximum conversion efficiency of about -16 dB and a 3-dB tuning bandwidth of ～10 nm are achieved for a 15 m holey fiber, and the tuning range can be improved with lower dispersion slope. So a compact wavelength converter can be realized by utilizing a highly nonlinear holey fiber.