New insights into the formation chemistry of chalcogenate-protected metal nanoparticles (NPs) synthesized via the well-known Brust-Schiffrin two-phase method are presented here. On the basis of Raman, NMR, and surface plasmon resonance characterizations, it is concluded that, before the formation of any metal-chalcogen bonds, metal nucleation centers/NPs are first formed inside the inverse micelles of the tetrabutylammonium bromide in the organic solvent, where the metal ions are reduced by NaBH4. The ensuing formation of the metal-chalcogen bonds between the naked metal NPs inside the micelles and the organo-chalcogen ligands in the organic solvent is the mechanism by which the further growth of the metal core can be controlled. This proposed mechanism is further examined in the formation of Ag and Cu NPs.