The two firms announced the investment in a joint statement on Tuesday but its details were not disclosed. Didi, which is expected to launch an initial public offering some time, is currently valued at $56 billion.
Booking Holdings, which changed its name from Priceline earlier this year, will allow users in its apps to hail Didi cars as part of the agreement, they said.
The new funds come as Didi is expanding heavily into several new overseas markets, where it hopes to challenge U.S. ride-hailing giant Uber Technologies.
The company has recently launched services in Mexico, Australia, and Japan, fueled by a $4 billion funding round in December that was earmarked for new markets as well as artificial intelligence (AI.)..
Booking Holdings, which is currently valued at over $97 billion, oversees some of the world's most popular travel booking sites including Bookings.com, Agoda.com, KAYAK, and Priceline.com.
Didi users will also have access to Booking Holdings' services through Didi, the Chinese company said.
China's travel booking market is already heavily dominated by local firms, including Ctrip.com International Ltd, which earlier this year signaled its intention to enter the ride-hailing market, posing a potential challenge to Didi.
Booking Holdings has users and partners in close to 220 countries, while a large majority of Didi's 550 million users are in China.