Background: Since 2001 the Netherlands has shown a sharp upturn in life expectancy (LE) after a longer period of slower improvement. This study assessed whether changes in healthcare expenditure (HCE) explain this reversal in trends in LE. As an alternative explanation, the impact of changes in smoking behavior was also evaluated. Methods: To quantify the contribution of changes in HCE to changes in LE, we estimated a health-production function using a dynamic panel regression approach with data on 19 OECD countries (1980-2009), accounting for temporal and spatial correlation. Smoking-attributable mortality was estimated using the indirect Peto-Lopez method. Results: As compared to 1990-1999, during 2000-2009 LE in the Netherlands increased by 1.8 years in females and by 1.5 years in males. Whereas changes in the impact of smoking between the two periods made almost no contribution to the acceleration of the increase in LE, changes in the trend of HCE added 0.9 years to the LE increase between 2000 and 2009. The exceptional reversal in the trend of LE and HCE was not found among the other OECD countries. Conclusion: This study suggests that changes in Dutch HCE, and not in smoking, made an important contribution to the reversal of the trend in LE; these findings support the view that investments in healthcare are increasingly important for further progress in life expectancy.