Thiolcapped CdTe nanocrystals (18 Å diameter) are investigated by extended x-ray absorption fine structure (EXAFS) measurements between 8 and 290 K at the Cd and Te K-edge. The different coordination sites of Cd in the particle core and at the surface are identified and are consistent with a CdTe particle core which is covered by a Cd–SR surface layer (R=organic rest). We are able to study individually changes of the properties of the interior and the surface of the nanoparticle with respect to bulk material. Structure and dynamics of the CdTe nanocrystals are mainly altered by the requirement of heteroepitaxial growth at the interface between the CdTe core and the Cd–SR shell. As a consequence, bond lengths and Debye temperatures of particle core and surface show a tendency to accommodate in thiolcapped CdTe nanocrystals. The trends in bond lengths variation observed in the experiment can be reproduced by calculations of the strain distribution induced by the lattice mismatch in a simplified isotropic model of a spherical CdTe nanoparticle which is encapsulated by a CdS bulklike shell. The experiment also shows a significantly enhanced static disorder both in particle core and surface. In contrast, the asymmetry of the radial pair distribution function of the Cd–S surface bonds is strongly elevated whereas the Cd–Te bonds in the interior of the particle show no enhancement with respect to bulk material. Experimental coordination numbers at the Cd and Te K-edge and the Cd/Te edge jump ratio are in good agreement with the expected values of a Cd54Te32(SR)528−-nanocrystal. This structural model is a larger homolog of a series of analogous CdS nanoparticles and consists of a CdTe tetrahedron which is partially coated by a Cd–SR surface layer. © 1998 American Institute of Physics.