Objectives Preventive dental health services are intended to reduce the likelihood of development of tooth decay and the need for more intensive treatment overtime. The evidence on the effectiveness of preventive dental care in reducing treatment services and expenditures is lagging for adults, particularly those with lower incomes and chronic conditions. We assessed the impact of preventive dental services on dental treatment service use and expenditures overall and by category of service. Methods We calculated the annual numbers of preventive (periodic diagnostic and prophylactic procedures) and treatment (restorative, surgery, prosthodontic, endodontic, and periodontic) services per beneficiary using Medicaid enrollment and claims data for beneficiaries with three categories of conditions (diabetes, heart disease, and respiratory disease) from 10 largest California counties. We used Cragg hurdle exponential regression models controlling for past service use, demographics, length of enrollment, and county. Results We found that using preventive services in 2005-2007 was associated with higher likelihood and number of treatment dental services used, but associated with lower treatment expenditures in 2008. The reduction in expenditures was noted only in restorative, prosthodontics, and periodontic services. Conclusions The findings provide much needed evidence of the contribution of preventive dental care in maintaining oral health of low-income adults with chronic conditions and potential for savings to the Medicaid program. Providing lower cost preventive dental care to the individuals with chronic conditions would achieve better oral health and lower treatment expenditures.