AbstractSingle nucleotide variant (SNV) has become an emerging biomarker for various diseases such as cancers and infectious diseases. Toehold‐mediated strand displacement (TMSD), the core reaction of DNA nanotechnology, has been widely leveraged to identify SNVs. However, inappropriate choice of mismatch location results in poor discrimination ability. Here, we comprehensively investigate the effect of mismatch location on TMSD kinetics by molecular dynamic simulation tool oxDNA through umbrella sampling and forward flux sampling disclosing that mismatches at the border of the toehold and branch migration domain yield the lowest TMSD reaction rate. Nine disease‐related SNVs (SARS‐CoV‐2‐D614G,EGFR‐L858R,EGFR‐T790M,KRAS‐G12R, etc.) were tested experimentally showing a good agreement with simulation. The best choice of mismatch location enables high discrimination factor with a median of 124 for SNV and wild type. Coupling with a probe‐sink system, a low variant allele frequency of 0.1% was detected with 3 S/N. We successfully used the probes to detect SNVs with high confidence in the PCR clones of constructed plasmids. This work provides mechanistic insights into TMSD process at the single‐nucleotide level and can be a guidance for the design of TMSD system with fine‐tuning kinetics for various applications in biosensors and nanotechnology.