Simulation techniques have been used to explore how the microstructure of a material influences the nature of associated impurities embedded therein. We illustrate this by exploring four systems: BaO and CaO nanoparticles encapsulated within a ("perfect") MgO host lattice and SrO and MgO nanoparticles encapsulated within a ("microstructural") BaO lattice, which comprises a network of screw-edge dislocations. This study uses annealing techniques to generate energetically feasible nanoparticle structures and morphologies, dislocation networks, interfacial boundaries, and strain profiles. Specifically, the different encapsulated nanoparticles exhibit a range of morphologies, expose a variety of facets at the nanoparticle/ host lattice interface, and are observed to rotate within the cavity they occupy inside the host lattice. The structure and nature of the nanoparticles reflect the lattice misfit between the nanoparticle and the host lattice. The study suggests also that there exists a "critical nanoparticle size", above which dislocations evolve.