We combine solution small-angle X-ray scattering (SAXS) and high-resolution analytical transmission electron microscopy (ATEM) to gain a full mechanistic understanding of substructure formation in nanoparticles templated by block copolymer reverse micelles, specifically poly(styrene)-block-poly(2-vinylpyridine). We report a novel substructure for micelle-templated ZnS nanoparticles, in which small crystallites (similar to 4 nm) exist within a larger (similar to 20 nm) amorphous organic inorganic hybrid matrix. The formation of this complex structure is explained via SAXS measurements that characterize in situ for the first time the intermediate state of the metal-loaded micelle core: Zn2+ ions are distributed throughout the micelle core, which solidifies as a unit on sulfidation. The nanoparticle size is thus determined by the radius of the metal-loaded core, rather than the quantity of available metal ions. This mechanism leads to particle size counterintuitively decreasing with increasing metal content, based on the modified interactions of the metal-complexed monomers in direct contrast to gold nanoparticles templated by the same polymer.