A kind of conductive composite yarn was designed and manufactured, then the resistance-strain characteristics of the knitted fabric based on the conductive composite yarn were tested and analyzed. The result showed that the yarn has excellent elastic deformation, better conductive performance, and good spin ability. The relationship between tensile deformation and resistance complies with contact resistance theory, the increasing of the elongation, the decreasing of the resistance. The resistance-strain curve accords with quadratic model, but the curve is linear Approximation and highly sensitive for the stresses of 0—12%. The sensitive of the curve is affected by the twist of the conductive composite yarn, the smaller the twist, the higher the sensitivity.