Here, we demonstrate the potential utility of using chemical modification to reorganize metastable nanoparticles into nanostructured nanoparticles without coincidentally inducing extensive necking/sintering. The motivation for this effort derives from the concept that chemical reduction in a single component in a mixed-metal nanoparticle will create segregated islands of a second immiscible phase. Given the very high chemical energies inherent in nanoparticles, the formation of even smaller islands of a second phase can be anticipated to lead to extremely high interfacial energies that may drive these islands to diffuse to cores or surfaces to form core-shell structures that minimize such interfacial energies. Thus, ammonolysis of (TiO2)(0.43)(Al2O3)(0.57) composition nanopowders where both elements are approximately uniformly mixed at atomic length scales, under selected conditions (1000 degrees C) for various periods of time at constant NH3 flow rates leads primarily to the reduction in the Ti species to form TiN or TiON which then appears to diffuse to the surface of the particles. The final products consist of Al2O3@TiON core-shell nanopowders that remain mostly unaggregated pointing to a new mechanism for modifying nanopowder chemistries and physical properties.