Davids was an integral part of the Dutch national team, since his debut in April 1994, though he has not won any major tournaments in the orange jersey.
During Euro 96, he was sent home by then Netherlands team manager Guus Hiddink for saying in a radio interview: "Hiddink must take his head out of players' arses, so he can see better." The Dutch team performed poorly in the tournament, despite coming there with great expectations.
Nonetheless, Davids remained appreciated by Hiddink, who included him in the Dutch squad for the 1998 FIFA World Cup in France. Davids' most notable performance for the national team came in the 1998 FIFA World Cup second round game against FR Yugoslavia. He scored the winning goal in the last minute of the game, and ensured that the Dutch team went through to the next round to meet Argentina. The Dutch team eventually finished 4th overall, and Davids was named for the official FIFA "Team of the Tournament".
He also played in Euro 2000 and Euro 2004 tournaments.
After Euro 2004, new national team coach Marco Van Basten appointed Davids as captain of the team. However, lack of first team football for his club Internazionale meant Davids also lost his place in the national team in October 2004, thus losing the captain's armband in the process. At the latter stages of the qualifying series for the 2006 FIFA World Cup in October 2005, he was re-called back into the national team, though not as captain. He fell out of the picture again shortly after, thereby missing out on the Dutch squad for the 2006 FIFA World Cup. Despite still being overlooked for the national team, Davids has not officially quit international football.