Formation of Z-DNA, a left-handed double helix, from B-DNA, the canonical right-handed double helix, occurs during important biological processes such as gene expression and DNA transcription. Such B-Z transitions can also be induced by high salt concentration in vitro, but the changes in the relative stability of B-DNA and Z-DNA with salt concentration have not been fully explained despite numerous attempts. For example, electrostatic effects alone could not account for salt-induced B-Z transitions in previous studies. In this paper, we propose that the B-Z transition can be explained if counterion entropy is considered along with the electrostatic interactions. This can be achieved by conducting all-atom, explicit-solvent MD simulations followed by MM-PBSA and molecular DFT calculations. Our MD simulations show that counterions tend to bind at specific sites in B-DNA and Z-DNA, and that more ions cluster near Z-DNA than near B-DNA. Moreover, the difference in counterion ordering near B-DNA and Z-DNA is larger at a low salt concentration than at a high concentration. The results imply that the exclusion of counterions by Z-DNA-binding proteins may facilitate Z-DNA formation under physiological conditions.