Spandex fibers have superior stretch and elastic recovery ability. Composite yarns containing spandex are frequently used to manufacture elastic textile products and accessories. We have developed a composite yarn spinning system that produces different kinds of composite yarns containing spandex on a modified open-end rotor spinning frame. By changing the twisting parameter of composite yarns, we studied the structure and properties of rotor-spun composite yarns with spandex. The results indicate that the twisting parameter has great influence on the structure and properties of rotor-spun composite yarns with spandex. The linear density of spandex filament has influence on the properties of composite yarns too. In comparison with normal rotor-spun yarn, the appearance of composite yarns is clearer, the structure is much tighter, and the properties are improved.