We report molecular dynamics simulations showing that a DNA molecule could be spontaneously inserted into carbon nanotube (CNT) in a water solute environment. The van der Waals and hydrophobic forces were found to be important for the insertion process, with the former playing a more dominant role in the DNA-CNT interaction. Our study suggests that the encapsulated CNT-DNA molecular complex can be further exploited for applications such as DNA modulated molecular electronics, molecular sensors, electronic DNA sequencing, and nanotechnology of gene delivery systems.