In this study, we investigate the microstructure and formation of segregated silicon nanocrystals (nc‐Si) from annealed Si‐rich SixN/SiyN multilayers. It is found the nc‐Si are separated and arranged in every sublayer with two different grain sizes. Through XPS and Raman analysis, it is discovered that Si atoms diffuse from the SiyN sublayers with smaller nc‐Si to the SixN sublayers with larger nc‐Si during annealing. Meanwhile, the grain size of SixN sublayers increase and that of SiyN sublayers decrease, compared to single layer sample. It is suggested that the atomic diffusion with grain size change phenomenon is ascribed to coalescence‐like growth followed by Ostwald ripening process, which eventually results in Si atoms transport from small Si clusters in SiyN sublayers to large Si cluster in SixN sublayers and forms the segregated nc‐Si multilayers. This work gives us better understanding of the nc‐Si growth and atomic diffusion in annealed Si‐rich multilayers.