The core-shell nanoparticle structure, which consists of an inner layer "guest" nanoparticle encapsulated inside another of a different material, is the simplest motif in two-component systems. In comparison to the conventional single-component systems, complex systems pose both challenges and opportunities. In this Account, we describe our recent progresses in using core-shell motif for exploring new and sophisticated nanostructures. Our discussion is focused on the mechanistic details, in order to facilitate rational design in future studies. We believe that systematic development of synthetic capability, particularly in complex and multifunctional systems, is of great importance for future applications. A key issue in obtaining core-shell nanostructures is minimizing the core-shell interfacial tension. Typically, one can coat the core with a ligand for better interaction with the shell. By selecting suitable ligands, we have developed general encapsulation methods in three systems. A variety of nanoparticles and nanowires were encapsulated using either amphiphilic block copolymer (polystyrene-block-poly(acrylic acid)), conductive polymer (polyaniline, polypyrrole, or polythiophene), or silica as the shell material. Obvious uses of shells are to stabilize colloidal objects, retain their surface ligands, prevent particle aggregation, or preserve the assembled superstructures. These simple capabilities are essential in our synthesis of surface-enhanced Raman scattering nanoprobes, in assigning the solution state of nanostructures before drying, and in developing purification methods for nano-objects. When it is applied in situ during nanocrystal growth or nanoparticle assembly, the intermediates trapped by shell encapsulation can offer great insights into the mechanistic details. On the other hand, having a shell as a second component provides a window for exploring the core-shell synergistic effects. Hybrid core-shell nanocrystals have interesting effects, for example, in causing the untwisting of nanowires to give double helices. In addition, partial polymer shells can bias nanocrystal growth towards one direction or promote the random growth of Au dendritic structures; contracting polymer shells can compress the embedded nanofilaments (Au nanowires or carbon nanotubes), forcing them to coil into rings. Also, by exploiting the sphere-to-cylinder conversion of block copolymer micelles, the Au nanoparticles pre-embedded in the polymer micelles can be assembled into long chains. Lastly, shells are also very useful for mechanistic studies. We have demonstrated such applications in studying the controlled aggregation of nanoparticles, in probing the diffusion kinetics of model drug molecules from nanocarriers to nanoacceptors, and in measuring the ionic diffusion through polyaniline shells.