The structure of metal nanoparticles embedded inside dielectric nanowires/nanotubes, namely nanopeapods, has been of increasing interest due to their unusual photoresponse and optical adsorption properties. This paper presents a type of new inorganic nanopeapod: faceted Au nanoparticles inside MgO nanowires. The Au self-assembles into a nanoparticle chain during the vapor-liquid-solid growth of the MgO nanowires for which gold also serves as the catalyst. Surprisingly such a chain can follow the whole axis of the MgO nanowires even if the latter zigzag, provided that the amount of gold is sufficient. It is shown that such Au@MgO nanopeapods form not only under metalorganic chemical vapor deposition conditions (Lai et al 2009 Appl. Phys. Lett. 94 022904), but also under our conventional vapor transport deposition condition. This new nanopeapod material might be a candidate for the study of electronic and/or plasmonic wave transport along nanowires.