Quantum dots consisting of an axial Zn_0.97Mg_0.03Te insertion inside a large-bandgap Zn_0.9Mg_0.1Te nanowire core are fabricated in a molecular-beam epitaxy system by employing the vapor–liquid–solid growth mechanism. In addition, this structure is coated with a thin ZnSe radial shell that forms a type-II interface with the dot semiconductor. The resulting radial electron–hole separation is evidenced by several distinct effects that occur in the presence of the ZnSe shell, including the optical emission redshift of about 250 meV, a significant decrease in emission intensity, an increase in the excitonic lifetime by one order of magnitude, and an increase in the biexciton binding energy. The type-II nanowire quantum dots where electrons and holes are radially separated constitute a promising platform for potential applications in the field of quantum information technology.