To understand how underwinding and overwinding the DNA helix affects its structure, we simulated 19 independent DNA systems with fixed degrees of twist using molecular dynamics in a system that does not allow writhe. Underwinding DNA induced spontaneous, sequence-dependent base flipping and local denaturation, while overwinding DNA induced the formation of Pauling-like DNA (P-DNA). The winding resulted in a bimodal state simultaneously including local structural failure and B-form DNA for both underwinding and extreme overwinding. Our simulations suggest that base flipping and local denaturation may provide a landscape influencing protein recognition of DNA sequence to affect, for examples, replication, transcription and recombination. Additionally, our findings help explain results from single-molecule experiments and demonstrate that elastic rod models are strictly valid on average only for unstressed or overwound DNA up to P-DNA formation. Finally, our data support a model in which base flipping can result from torsional stress.