A novel electrochemical strategy that uses DNA-wrapped carbon nanotubes (CNTs) as electrochemical labels is developed for sensitive and selective detection of sequence-specific DNA. The presence of target DNA mediates the formation of a sandwiched complex between the DNA-wrapped CNT and a hairpin DNA capture probe immobilized on magnetic beads. This allows target-selective collection of the CNT labels by magnetic separation and transfer on the electrode surface modified with an insulating self-assembled monolayer (SAM). After treatment with N,N-dimethylformamide, the collected sandwiched complex releases the bare CNTs and facilitates the removal of magnetic beads from the electrode surface. The bare CNTs can then assemble on the SAM-modified electrode surface and mediate efficient electron transfer between the electrode and the electroactive species in the solution with a strong current signal generated. The results indicate that the developed strategy shows a sensitive response to target DNA with a desirable signal gain and a low detection limit of 0.9 pM. This strategy is also demonstrated to provide excellent differentiation of single-base mismatch in target DNA. It is expected that this electrochemical strategy may hold great potential as a novel platform for clinical diagnostics and genetic analysis.