Z-DNA is stabilized by various Z-DNA binding proteins (ZBPs) that play important roles in RNA editing, innate immune response, and viral infection. In this review, the structural and dynamics of various ZBPs complexed with Z-DNA are summarized to better understand the mechanisms by which ZBPs selectively recognize d(CG)-repeat DNA sequences in genomic DNA and efficiently convert them to left-handed Z-DNA to achieve their biological function. The intermolecular interaction of ZBPs with Z-DNA strands is mediated through a single continuous recognition surface which consists of an α3 helix and a β-hairpin. In the ZBP-Z-DNA complexes, three identical, conserved residues (N173, Y177, and W195 in the Zα domain of human ADAR1) play central roles in the interaction with Z-DNA. ZBPs convert a 6-base DNA pair to a Z-form helix via the B-Z transition mechanism in which the ZBP first binds to B-DNA and then shifts the equilibrium from B-DNA to Z-DNA, a conformation that is then selectively stabilized by the additional binding of a second ZBP molecule. During B-Z transition, ZBPs selectively recognize the alternating d(CG)n sequence and convert it to a Z-form helix in long genomic DNA through multiple sequence discrimination steps. In addition, the intermediate complex formed by ZBPs and B-DNA, which is modulated by varying conditions, determines the degree of B-Z transition.