Sub-micrometer-sized targets are found in intense laser–cluster interaction experiments and laser-based material processing. Here, we investigate the internal field localization due to Mie scattering and its effect on ionization dynamics in sub-micrometer-sized clusters using Mie calculation and particle-in-cell simulations. As a result of intertwined processes of pulse propagation and ionization, sub-micrometer nanofocusing dominates at lower intensity and gives rise to an ionization hotspot at the rear of the targets while plasma shielding wins over at a higher intensity, stopping further rear side ionization. As ionization is often the precursor of other processes, understanding the ionization dynamics of ultrafast laser pulses with wavelength-sized nanostructure can be relevant for intense laser-cluster experiments and femtosecond laser micro-/nanomachining.