[Read: Argentina beat Belgium 1-0]
In a masterstroke from Dutch coach Louis van Gaal Newcastle United keeper Krul came on as a last gasp substitute for Jasper Cillessen, who had just minutes back made a brilliant save to keep the scores goalless.
PENALTY SHOOT-OUT: WHO HIT, WHO MISS
Costa Rica: Celso Borges, Giancarlo González and Cristian Bolaños scored while Bryan Ruiz and Michael Umaña missed.
The Netherlands: Robin van Persie, Arjen Robben, Wesley Sneijder and Dirk Kyut scored.
Krul justified his substitution as he made two fine saves to end Costa Rica's dream run in the competition.
Netherlands had the last laugh in a match that saw them struggling to score
For a country that has not win a single penalty shootout in World Cup finals, the Dutch were clinical from the spot kick. Their four penalties -- Robin van Persie, Arjen Robben, Wesley Sneijder and Dirk Kuyt - all hit the side netting giving Costa Rica goalie no chance.
The Netherlands would have expected to beat their Central American opponents in the first 90 minutes but they found stiff Costa Rican defence in the way.
Costa Rican goalkeeper Keylor Navas was the difference between a comfortable Dutch win and a the score being goalless at the end of the 90 minutes plus 30 minutes of extra time.
The woodwork came to the rescue twice for Costa Rica as they held onto take the Netherlands to penalties.
Patience was the name of the game in the first half as both teams were extremely slow in possession.
The Netherlands and Costa Rica went into the break goalless, partly thanks to the goalkeeping heroics of Navas.
The Netherlands had lion's share of possession and created the two best chances of the half while Costa Rica failed to force even a single save out of Jasper Cillessen.
Sneijder and Van Persie had their goal-bound shots beaten away by the amazing Keylor Navas,
For Costa Rica Celso Borges was an aerial threat, while Bryan Ruiz and Joel Campbell showed in flashes what they are capable of.
Costa Rica, though, were no threat going forward and posed little danger to Cillessen's goal.
The Dutch had 67 percent of the possession in the first half but the killer instinct they showed in their 5-1 decimation of Spain earlier in the tournament was lacking.
The beginning of the second half saw much of the same play being adopted by both teams.
The Netherlands held the ball but couldn't do much with it while Costa Rica, too often, gave the ball away cheaply.
Arjen Robben had a more productive start to the half and was the only bright spark for a misfiring Dutch attack.
But as the half progressed both teams started taking more risks, thus, opening spaces for players
Sneijder was the main hub for Dutch creativity, picking out diagonal passes and looking to drive at the Costa Rican defence and commit defenders to the ball.
The Netherlands were comfortable on the ball, but their opposition were happy to surrender possession. Costa Rica relied solely on quick counter attacks with Ruiz and Campbell combing well on occasions.
The game, though, exploded in the last 10 minutes as the Dutch went on all out attack.
Sneijder hit the bar from swerving free-kick while Robin van Persie missed a hatful of chances.
In a dramatic end to the 90 minutes, where the two sides couldn't be separated, Costa Rica somehow survived a tremendous goalmouth scramble thanks to Yeltsin Tejada's goalline save and the crossbar.
Daley Blind's ball across the six-yard box missed everyone, before Van Persie cannoned a ferocious effort at goal, but it hit Tejada before clattering onto the crossbar.
The first half of extra time saw Dutch pressurise the Costa Rica defence. They didn't seem to be in any rush in possession while the Central Americans clearly looked to be playing for the dreaded penalty shoot-out.
In the second half of extra time, Louis van Gaal opted to make his second change, deploying Klaas Jan Huntelaar in attack to bolster his misfiring Oranje options.
Martins Indi was replaced as the Dutch went for broke.
Sneijder hit the frame work of the goal for the second time in a frantic end to the extra time where both teams could have won it.