The DNA is a double helix of two single-stranded (ss) backbone chains paired by compli- mentary bases via hydrogen-bonding and further stabilized by stacking interaction between adjacent base-pair (bp) planes [1]. Owing to recent advances of single molecule techniques, intensive studies have been done on structural changes and mechanical behaviors of double- stranded (ds) DNA constrained by external forces and twists. The continuum elastic model, called wormlike chain (WLC) model has been very useful in analytically describing the micron-scale conformations and elastic response of such DNA [2]. The persistence length, the measure of segmental orientation correlation, is about 50 nm (equivalently, about 150 bases along contour) for dsDNA. On the contrary numerous biological facts suggests DNA loops more readily on much shorter length scales. Indeed, Cloutier and Widom showed that the DNA has much higher cyclization probability than predicted by a WLC of persistence length of 50 nm [3]. Also, Wiggins et al. showed the DNA on short length scale has an elastic behavior distinct from that of WLC [4], while Yuan et al . very recently have reported the persistence lengths are as short as 11 nm for DNA fragments consisting of 10 ∼ 20 base-pair (bp) [5]. In this paper we demonstrate that the higher flexibility of dsDNA emerges on shorter scales indeed due to local denaturation. Because of the large initiation energy, the fraction of the open bases is less than 1% at the physiological temperature, and, once formed, bubbles decay shortly in the order of 50 µ s [6], seemingly little affecting the DNA stability. We show that despite their rare and transient presence the bubbles give a drastic enhancement of the flexibility as the chain gets shorter. For a very short duplex fragment, another type of local denaturation, namely, forks at the free ends are entropically favorable, dominating over the bubbles to enhance the flexibility, and eventually driving the duplex to unbind into two single strands. It was suggested and estimated that the baseflips [5] and kinks [7] can enhance the bending flexibility and looping probability. Based on a simple two state model, the looping probability was evaluated using transfer matrix method [7]. Although all these calculations are suggestive of their significance, the bubbles have not yet been explicitly accounted for with regard to their size distributions and realistic energetics. We consider a homogeneous dsDNA as the duplex of two interacting single strands de- scribed by the effective energy H = H$_{1}$ + H$_{2}$ + V$_{12}$ . (1) 2