Noble-metal nanoparticles embedded in dielectric matrices are considered to have practical applications in ultrafast all-optical switching devices owing to their enhanced third-order nonlinear susceptibility, especially near the surface-plasmon-resonance (SPR) frequency(1,2). Here we present the use of a microreactor approach to the fabrication of a self-organized photosensitive gold nanoparticle chain encapsulated in a dielectric nanowire. Such a hybrid nanowire shows pronounced SPR absorption. More remarkably, a strong wavelength-dependent and reversible photoresponse has been demonstrated in a two-terminal device using an ensemble of gold nanopeapodded silica nanowires under light illumination, whereas no photoresponse was observed for the plain silica nanowires. These results show the potential of using gold nanopeapodded silica nanowires as wavelength-controlled optical nanoswitches. The microreactor approach can be applied to the preparation of a range of hybrid metal - dielectric one-dimensional nanostructures that can be used as functional building blocks for nanoscale waveguiding devices, sensors and optoelectronics.