Bimetallic nanoparticles (BNPs) exhibit diverse morphologies such as core-shell, Janus, onion-like, quasi-Janus, and homogeneous structures. Although extensive effort has been directed towards understanding the equilibrium configurations of BNPs, kinetic mechanisms involved in their development have not been explored systematically. Since these systems often contain a miscibility gap, experimental studies have alluded to spinodal decomposition (SD) as a likely mechanism for the formation of such structures. We present a novel phase-field model for confined (embedded) systems to study SD-induced morphological evolution within a BNP. It initiates with the formation of compositionally modulated rings as a result of surface directed SD, and eventually develops into core-shell or Janus structures due to coarsening/breakdown of the rings. The final configuration depends crucially on contact angle and particle size - Janus is favored at smaller sizes and higher contact angles. Our simulations also illustrate the formation of metastable, kinetically trapped structures as a result of competition between capillarity and diffusion. © 2022 Acta Materialia Inc.