Rayleigh instabilities in bilayers of poly(methyl methacrylate) (PMMA) and polystyrene (PS) confined within the cylindrical nanoporous anodic aluminum oxide (AAO) membranes were investigated. The bilayered nanotubes were thermally annealed to induce phase separation and instabilities in the confined films. For short annealing times, the nanotubes were transformed into nanorods with periodic encapsulated air pockets. With longer annealing times, the air-pockets coalesced to form columns of air. Small air inclusions encased in periodic domains of PS were, in turn, incorporated within PMMA nanorods. Selectively removing the PMMA by exposure to UV radiation and washing with acetic acid, left PS nanospheres with an air inclusion. Gold nanoparticles having PS ligands were also incorporated within the PS phase, generating novel composite morphologies.