Fabric-based strain sensors have been developed using different technologies, among which flat knitting is one of the most effective and economical methods. However, knitted strain sensors are not often used in practical applications because the sensors usually exhibit large elastic hysteresis when they are deformed and subjected to stress during application. One possible approach to overcome these shortcomings is to introduce elastic properties at the yarn level by combining the conductive materials with elastic materials. In this paper, we demostrate a hybrid yarn made of a conductive yarn that winds around an elastic core yarn in a direct twisting device. The electro-mechanical properties of strain sensors knitted from the hybrid yarns were tested in order to characterize the sensors. This study consisted of two stages: the yarn preparation and the sensor characterization. In the first stage, two kinds of elastic core components (polyamide/Lycra and polyamide) and two kinds of conductive winding yarns (Bekinox BK50/1 and Bekinox BK50/2) were selected for twisting. The twisting was done with a constant twisting speed and four different numbers of twists. Mechanical properties, that is, the tenacity, force at break and elongation at break, were tested in order to determine the optimal parameters for producing the hybrid yarns. The results indicated that among the tested yarns those with a polyamide core and Bekinox BK50/1 winding yarns at 450 twist/meter and with a polyamide/Lycra core and Bekinox BK 50/2 winding yarns at 600 twist/meter had the best properties. These were thus selected as the materials for producing knitted strain sensors. In the second stage, electro-mechanical properties of the knitted strain sensors were determined under tensile stress and multi-cyclic tensile stress. The results show that the hybrid yarns can effectively enhance the