Metal telluride/Te heterostructure nanowires are important thermoelectric materials and it is important to be able to tune these materials according to the requirement of the application. In order to do so, a good understanding of the reaction mechanism and critical observation of the evolution of the nanowire heterostructure during the course of reaction is essential. Here, single crystalline, anisotropic Te core/Bi2Te3 shell nanowires have been synthesized by a facile template-based wet chemical synthesis method. The formation and evolution mechanism of the heterostructure has been elucidated by several control reactions, detailed transmission electron microscopy imaging and composition analysis using energy dispersive spectroscopy in scanning transmission electron microscopy mode of the products of the reactions. Fundamental understanding of the formation mechanism and time-dependent evolution of the core-shell structure in the nanowire have led to successful designing of higher order heterostructures involving Te/Bi2-x Pb x Te3. Through this study, interesting insights into the crystal structure evolution, crystal growth and miscibility of PbTe and Bi2Te3 into each other is obtained.