The game was marked by end-to-end action and spectacular goals - notably a stunning volley by Australia's Tim Cahill which canceled out a goal by the Netherlands' Arjen Robben only a minute earlier.
It was against the run of play when Robben opened the scoring in the 20th minute. Picking up the ball on the halfway line, he charged towards the goal like a bull to a matador and slammed the ball past Mat Ryan.
Tim Cahill replied immediately, however, by crashing a fantastic 20-meter volley into the roof of the net for what will be a strong contender for goal of the tournament. It was Cahill's 5th goal in three World Cups.
After that the pace stepped up as the Dutch tried to get more wind in their sails but it was the Australians who looked more threatening. Mark Bresciano missed a good chance in the 30th minutes when good work by Matthew Leckie set him up only for him to blast wide.
Nine minutes into the second half, Australia were awarded a penalty after Oliver Bozanic hammered the ball straight at Daryl Janmaat's arm.
Socceroos captain Mile Jedinak cooly slotted the penalty passed Jasper Cillissen, giving Australia a 2-1 lead and the chance to dream.
But this time it was the Netherlands' turn to strike back quickly. In the 58th minute Robin Van Persie banged in a well-controlled shot inside the penalty area.