The EcoRI DNA dodecamer d(CGCGAATTCGCG)(2) is investigated by state-of-the-art molecular dynamics simulations. The B-I --> B-II transition is shown to be a consequence of destacking processes of adjacent base pairs and is coupled with migration of water from ionic phosphate to the sugar oxygen. Two-thirds of the double-helical base steps temporarily are in the B-II substate. The time-averaged B-I/B-II population ratio is 9.2, but at a given time, it can be as low as 2.7. Observed changes in the solvation properties closely match recently reported spectroscopic features. The different time scales of all processes involved are discussed with respect to experimental results. Formation of contact ion-pairs is demonstrated to be independent of substate transitions.