To increase the protective capacity of yarns while maintaining human wearing comfort, pure UHMWPE filament and Spandex were combined to fabricate an elastic high-performance covered yarn. The various wrapping process parameters were adjusted to prepare this single-lay-covered yarn with a perfect wrapping status, which also can achieve the balance of strength and elasticity. It was discovered that the wrapping process seriously affected the covered yarn’s performance, and the new single-lay covered yarn showed desirable high strength and super elasticity. The strength of covered yarns shows three types of trend with the twist added, including first steep (300 t/m∼400 t/m), then gentle (500 t/m∼600 t/m) and last drastic (700 t/m∼800 t/m). The covered yarn twisted at 700 t/m shows the optimal coverage morphology, excellent elasticity, and high strength. Finally, an elastic cut-resistant fabric is practically knitted by this fabricated elastic cut-resistant composite yarn, and it presents good flexibility and protection with Level 2 cut resistance under standard testing. The fabricated elastic high-performance covered yarn is an ideal material for producing highly elastic protective textiles and is applied to manufacture high-quality flexible protective equipment.