Two goals from Robin Van Persie and Arjen Robben inspired Holland to a thumping 5-1 win over Group B rivals Spain.
The Dutch produced a devastating display of counter-attacking football in a wonderful second-half display to leave Spain utterly shell-shocked - who had initially opened the scoring.
Spain took the lead when Diego Costa was fouled in the box by Stefan De Vrij after 26 minutes, giving Xabi Alonso the chance to score and the Real Madrid midfielder duly obliged by converting the resulting penalty past a sprawling Jasper Cillessen.
Just before half-time, the Ajax goalkeeper was to thank after making a superb save to deny David Silva’s neat chip - preventing Spain from doubling their lead..
Having looked almost certain to concede a second, Holland broke on the counter and full-back Daley Blind fired a superb ball into the path of Van Persie, who spotted Iker Casillas off his line and executed a magnificent header over the Real Madrid ‘keeper to level the scores.
After half-time, the Dutch took the lead after Blind played another wonderful ball over the Spanish defence and onto the foot of Robben, who shimmied past Gerard Pique and fired past Casillas to make it 2-1.
Holland added a third after the hour mark when De Vrij met Wesley Sneijder’s curling free-kick at the back post – and despite appeals from Spain that Casillas was blocked by Van Persie, the goal was given.
Louis Van Gaal's side scored their fourth after Casillas catastrophically gifted possession to Van Persie in the Spanish area, and the 30-year-old prodded the ball into an empty net.
The rout was complete after Robben showed his blistering pace to get beyond Sergio Ramos, and after twisting and turning in Spain’s box, the Bayern Munich winger fired into the top corner to make it 5-1 - ending a miserable night for Vicente Del Bosque’s men.
Holland should have taken the lead after just eight minutes, but Wesley Sneijder botched a wonderful opening.
Robben produced the pass that sent Sneijder bearing in on goal but he snatched at his lofted shot and allowed Iker Casillas to thrust his right glove up and make the save.
Spain rallied quickly from that scare and soon began to stamp themselves on the game.
By 20 minutes the Dutch were being dictated to by Xavi, Iniesta, David Silva and Xabi Alonso, with Ron Vlaar producing at least two desperate blocks.
The controversial penalty followed in the 26th minute, starting with Xavi's beautifully weighted pass for Costa, who surged into the area and took two touches before turning De Vrij, who appeared in real time to trip him.
By the time Xabi Alonso had buried the spot-kick, replays showed Costa apparently initiating contact.
Cillessen's fantastic save to deny Silva paved the way for Van Persie's leveller, the Manchester United man reading the space perfectly as he leapt to head Daley Blind's hanging cross high over the helpless Casillas.
The reation was rampant, not least from the high-fiving Louis van Gaal on the touchline.
The celebrations were even better eight minutes into the second half, when a piece of Robben magic gave them the lead.
Van Persie's chip picked out his team-mate, but he had plenty still to do as he controlled the ball brilliantly with the outside of his boot before turning Gerard Pique and Sergio Ramos, converting with a slight deflection off the latter.
Things might have unravelled completely for the holders had the referee spotted Costa's apparent headbutt on Bruno Martins Indi, but the incident went unseen.
There was no holding Holland back, though, Van Persie cracking a volley against the crossbar on the hour before De Vrij made it 3-1 from Sneijder's curling free-kick.
Casillas came to claim but failed, with De Vrij on hand to bundle home at the far post.
The pace only increased from there, Silva's close-range finish chalked off for offside before Holland extended their lead to three in the 72nd minute.
Casillas was wholly culpable this time, turning a harmless back pass into one dreadful touch and an open goal for the alert Van Persie.
Robben completed Spain's misery with 10 minutes left, collecting Sneijder's pass and then reducing Casillas and his defenders to a floundering mess as he made room for an emphatic finish.
Holland might have scored two more had they been more clinical, and Spain's Fernando Torres made a woeful blunder from close range, but their statement was already well made.